Tuesday, October 8, 2019

Investment Perspectives: Oil Prices, Repo Non-Crisis, and Stocks in October

Key Takeaways

  • We are optimistic that higher oil prices will not so easily precipitate an economic downturn.
  • Delving deeper into the financial plumbing to look at the repo market.
  • October is here. Off to a wild start for stocks, but it’s a long month ahead.

In this month's issue:

Are Oil Prices an Economic Risk? - Mark Luschini
After surging up by nearly 20% on the morning of September 23rd (the biggest one-day spike in history), Brent crude oil prices have retreated to the low $60s a barrel, representing a markup of just a few percentage points over where they were before the strike on Saudi Arabia’s state-owned oil facility.

The Repo Non-Crisis - Guy LeBas
The last several weeks have seen attention paid, coupled with an impressive amount of misinformation laid, to the short-term financing markets. Most of this attention stemmed from an unusual increase in repurchase agreement (repo) borrowing rates in mid-September.

October in Full Effect for Stocks - Greg Drahuschak
Several attempts by the S&P 500 to exit the top of its multi-month trading range failed last month. After struggling below technical resistance through August, early in September the S&P 500 finally surpassed well-defined resistance at 2950, reaching as high as 3021.99 on September 19 before sliding back toward the key resistance level near the end of the month.

You can read the full Investment Perspectives here.