EC It's Officially Alt Season

Traditional Markets

Speaking with CBS in a rare interview last night, Fed Chairman Jerome Powell gave some of his thoughts on the local and global economies. The divergence of which, as Powell puts it, is cause for remaining cautious.

Because the global economy is reliant on the US Dollar, the Fed is having a difficult time normalizing monetary policy even though things are great at home, because of the possible effect on other markets. More than that though, Powell noted possible risks from the slow down in China and Brexit.

It is possible that these risks are the reason the stock market just closed its worst week so far this year (purple rectangle), which isn't saying much as it's been a fantastic year. Markets are looking bright this morning in Asia and Europe, and it will be interesting to see how we handle the US session.

The KSA's Grip on Oil

Sometimes you need to take a step back in order to gain ground.

This is exactly what Saudi Arabia is trying to do with the oil market. The Kingdom's clients have reportedly requested a total of 7.6 million barrels per day yet, according to reports, they only plan to supply 7 million.

As the United States has now been mostly energy independent for the last six months, and Venezuela is unable to provide any sort of stable production, the KSA is determined to limit supply as much as possible in order to drive up prices and regain their dominance.

News like this would be cause enough for a rally across the energy sector just a few years ago but today oil is having trouble regaining it's monthly high (purple circle).

When employing the above strategy of taking a step back, it could also backfire, making it difficult to regain the ground given up.

Last week, Norway has announced one of the largest divestments from oil and gas stocks in history as the country moves towards a cleaner sovereign investment portfolio. Not sure how this impacts things but just wanted to throw it in there as I believe it points to a wider trend of investors becoming a bit more conscientious. 

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Please note: All data, figures & graphs are valid as of March 11th. All trading carries risk. Only risk capital you can afford to lose.

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