• February 20, 2020

ELAM: Dems, what’s the problem? - Odessa American: Dennis Elam

ELAM: Dems, what’s the problem?

Print
Font Size:
Default font size
Larger font size

Posted: Sunday, January 19, 2020 4:00 am

The vote was 89-10 as an overwhelming majority of senators of both parties supported the agreement, as expected. Last month, the House of Representatives approved the revised agreement by a similarly wide margin.

Senate Approves USMCA Trade Deal 89-10

And in the same week, the Chinese apparently decided Trump will be the next US President and signed Phase One of a trade deal with the US. The thing to note is that the Chinese did not wait for the November election. They are not hoping to revert to another go along to get along, ‘yeah we know the Chinese cheat our pants off on Intellectual Property Rights but so what?’ that sounds like a bet on a Trump victory to me.

P T Barnum was the ultimate showman in his day but the Donald is surely his .The Democrats can’t wait to discard the the first two amendments to the Constitution as well as the Electoral College but roundly endorsed the document in Impeachment Proceedings this week. To cap it off several stock indexes hit new all time highs and Google topped a trillion in market value. Oh, and Trump held a rally in Milwaukee as the Democrats ‘debated.’ Years ago Democrat strategist James Carville noted it’s the economy stupid, and that has merit today.  Top that with record low unemployment for Hispanics and Blacks, and well, I am guessing Americans will vote their pocketbooks.

This column has taken the position that the energy sector hit a long term low last August.  Share prices and crude oil itself advanced to about $65. We have had the inevitable correction since, with crude up Thursday and another 36 cents today.

Predicting oil prices also requires a look at the entire energy complex. I would call for the low in crude oil based on the last couple of days BUT (gee there is always a but) heating oil set another low Thursday.  Let’s hope it turns up today.

Energy trusts like PBT and MVO had nice advances, Prudhoe Bay BPT jumped 50% since November but gave back a lot this week. The increase there and in Nustar NS and Alerian AMLP is also encouraging.

Natural gas futures like heating oil sagged again Thursday. Looks like it will test the August low at $2.05, now $2.08.

Our bottom line is this. The overall stock market is behaving like early 20158. Then there was a similar parabolic advance. That was followed by an eventual DJIA 3,000 point correction and up and down movement until a larger collapse in the fall. My take is that the FANG stocks are overdone here and a top is likely this next week. The surprise may be in beaten down energy and metals, if the US Dollar continues to weaken.

Follow Dennis at http://www.themarketperspective.com

PS A Happy 100th Birthday to long time Andrews resident Dorothy Hendrick now residing in Frisco, Texas. Family and friends gathered this past weekend to celebrate.

DAILY OIL PRICE: February 20

  • Crude Oil: 53.78 (+0.49).
  • Nymex MTD AVG:  51.2460.
  • Natural Gas: 1.920   (-0.035).
  • Gasoline: 1.6697   (+0.0064).
  • Spreads: March/April   (-.10)   April/May   (-.18).
  • Plains WTI Posting: 50.25   (+0.50).
Plains All American logo.jpg