Market Briefing For Monday, Dec. 4th

Brushing aside Powell comments Friday afternoon, S&P held traction. He'd tried to hint at tightening financial conditions (nonsense, given softer data). At the same time I'm open to a pause-to-refresh move this month; I am currently not looking for new disorderly catastrophe. Such ideas are also nonsense.

On the other hand, besides the Middle East war resumed and considered as a long-haul situation; I would rather not (nor can Israel maintain mobilization) envision a year-long process to stabilize and de-radicalize Gaza. Also now we note Ukraine buttressing defenses, nervous that the U.S. might neglect them in the middle of Winter; and as Russian increases border incursions. Plus now you have another phase of 'banana republic war risk'.

I'm sharing a 'map' of the region that goes into more detail about Venezuela's late intrusion into an already-warmer crisis involving Brazil, so this could in theory expand into something. The USA is not involved for now; although friendlier policies towards buying Oil from the corrupt Caracas regime, rather than expanding U.S. domestic production, is a part of this. I'll share a map and do not have info. on Brazilian deployments.

Financial conditions have eased; the pressure came off many market areas, and we have Indexes revisiting 52 week highs, or at least the potential. So it's tough to get too optimistic on big stocks now; given the S&P's steady move up from our October washout lows. However, the bifurcation may allow smaller or suppressed stocks to rebound, perhaps even before we get into year-end

Many stocks remain in the identical context we've discussed: trying to emerge from long-term basing patterns after being pummeled beyond recognition. It's a toss-up for many as to whether their business prospects have improved, or they were aspirational, but unable to execute at a pace they had anticipated.

 

 

 

 

 

Bottom-line: let's see what happens in South America. That might be a mini-catalyst for the pause-to-refresh by S&P that I've thought coming. Referendum in Venezuela is Sunday. Guyana correctly fears that is just a pretext for land grabs, and appealed to the International Court of Justice (ICJ), which warned Caracas but did not order it to halt the referendum.

Maduro's pals in Rio have moved troops North, as between Brazil, Guyana and Venezuela, that's the largest 'proven oil reserves' in the world. Hence this is more than politics; even as Maduro isn't clearly running for re-election with a measly 20% favorable poll rating (does he care?). Let's see: he starts a war, exiles Chevron and Exxon-Mobile (who expanded Guyana production); grows his relationship with the Biden Administration; and sells the Oil to us. Sigh.


More By This Author:

Market Briefing For Wednesday, Nov. 29
Market Briefing For Tuesday, Nov. 28
Market Briefing For Monday, Nov. 27

This is an excerpt from Gene Inger's Daily Briefing, which typically includes one or two videos as well as more charts and analyses. You can follow Gene on Twitter  more

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