May 5…)
“What has happened in the last 30, 45 days…is really nothing,” Buffett said at Berkshire Hathaway’s annual meeting over the weekend. “This is not a huge move. This has not been a dramatic bear market or anything of that sort.”
In the news
The USD/TWD (Taiwan dollar) is melting down in Taiwan, falling approximately 7% today (multiple sources). This may have been brewing for some time, and a culmination of factors like strong GDP news and a wave of repatriation flows from smaller Taiwanese firms.
According to BBG this morning: “[The central bank] may have held off from its typical ‘smoothing’ of FX moves as part of trade talks with the US, and finally, the market’s biggest fear is that Taiwan’s giant life insurers will be caught wrong-footed by FX moves and forced to reduce their hefty positions in US assets.” S&P 500 indices are lower; gold is higher.
In oil news, KSA issued another statement following a meeting on Saturday that oil supplies will begin rising in June. Futures opened $2.50 lower at 6 PM in Asia last night and rallied steadily through the session. Quotas are expected to rise as much as 2.2 million bpd by November. This is a number that continues to rise. July Brent just missed its $58.40 April 9 low by 0.10 cents last night.
July Brent daily data chart below.
On the NYMEX, open interest is far less extreme than ICE, which makes sense. An unfolding US energy policy is the primary force influencing future production. US refiners are adequately supplied but not excessively. So far, the bear move in oil has been exclusively in paper barrels. Talk and news items move futures. Ships and pipelines move oil.
GS said in a note yesterday, “Our key conviction remains that high spare capacity and high recession risk skew the risks to oil prices to the downside, despite relatively tight spot fundamentals.”
NYMEX WTI weekly data chart below.
In tariff news, DJT said he might charge foreign films as much as 100%, and he might cut China some slack… maybe… someday. As an aside, Apple has been making great movies lately.
According to realtor.com, there is a glut of unsold houses in Florida.
In the markets this morning:
Gold, offshore Yuan, silver, S&Ps, bitcoin and a very mixed bag in the vibe
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