- Oil tumbles 7%, extends record string of declines. WTI posted its largest single-day decline in three years yesterday, extending its record losing streak to 12 days. The slide came after OPEC revised down its 2019 demand estimate by 500k barrels per day (bpd) while forecasting an “alarming” resurgence of non-OPEC supply, led by the U.S. The report likely underpins recent calls from Saudi Arabia and other cartel members to cut supply by 1+ million bpd when it meets in Vienna next month, but criticism from President Trump helped prices sustain downward momentum in Tuesday’s session. Losses have been mounting as traders fear a supply glut comparable to the one seen in 2014 may be forthcoming, and recent data has heightened worries that global growth may be moderating (gross domestic product out of Germany, France, and Japan contracted in Q3). However, traders are getting some of the blame with money managers’ combined bullish positions currently at 14-month lows, reflecting both an increase in short positions and a decrease in long positions, and U.S. high yield spreads-a gauge for monitoring credit risk in the energy sector-remain well off the late-2015 levels, a period also characterized by plunging oil prices and global growth concerns.
- Brexit draft deal reached, but high hurdles remain. The UK may be poised to separate from the European Union (EU) next year after officials reached a tentative withdrawal agreement following more than a year of negotiations. However, Prime Minister Theresa May must still get it approved by her cabinet in an emergency meeting being held at 2:00 local time today before it makes its way to parliament for a vote tentatively slated for Dec. 10, neither of which are a sure thing. And in the meantime, the EU council will meet in the (Nov. 25). Should the deal pass these hurdles, an orderly separation from the EU would occur on March 29, 2019. Should it fall short, a few scenarios could play out, including a second referendum, but reports suggest a real chance that the UK ends up residing in a legal limbo that could freeze markets and stymie trade with the EU. Though the government has contingencies in place for such an outcome, the implications of those plans suggest UK residents probably want to cross their fingers that it passes.
- LPL Advisors’ Top Tweets. Check out the LPL Research Blog later today to see some of our favorite advisor tweets from October. We are grateful for all the terrific engagement with advisors on social; please join us via @LPLResearch.
- LPL Market Signals Podcast. In our latest episode, listen to LPL Financial Chief Investment Strategist John Lynch and Senior Market Strategist Ryan Detrick discuss potential post-midterm gridlock and why history indicates it might not be bad for investors. Subscribe to the free Market Signals podcast series on iTunes, Google Play, Spotify, or wherever you get your podcasts!
- CPI Report (MoM, Oct)
- Germany GDP Report (Preliminary, Q3)
- Eurozone Industrial Production (Sep)
- Eurozone GDP Report (Preliminary, Q3)
- Retail Sales (MoM, Oct)
- Initial Jobless Claims (Nov. 10)
- Business Inventories (MoM, Sep)
- Eurozone Trade Balance (Sep)
- Eurozone CPI Report (Oct)
- Industrial Production (MoM, Oct)
- Capacity Utilization (Oct)
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