Todd Sullivan | TalkMarkets | Page 28
Hedge Fund Manager, Owner of ValuePlays and Angel Investor
Contributor's Links: ValuePlays Rand Strategic Partners
Todd Sullivan is a Massachusetts-based value investor and a General Partner in Rand Strategic Partners. He looks for investments he believes are selling for a discount to their intrinsic value given their current situation and future prospects. ...more

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Oil Going Still Higher
The EIA reports indicate record exports of US Crude Exports and US Export Refined Products continue to be achieved.
T-Bill/10yr Treasury Spread Forecasts A Continuing Expanding Economy
The discussion today is much about the 10yr Treas rate breaching above 3%. Higher rates can have an impact on asset prices when compared to Cash Flow Yields.
Oil, Economics And Risk
The action the past few days of weak $WTI/stronger US$ is being reversed on Trump’s strong response to Syria’s actions. Will be interesting to watch next few days.
FANG Vs The Market
Economic activity continues to be strong. Once the FANG correction is over, I expect markets to rise to new highs.
Key Indicators Growing…
Chemical Activity Barometer(CAB) is reported at 121.19 which represents a short pause after strong period of rise.
Boeing’s Valuation Pop
Should BA be price this highly?
The Fed Is Behind The Market On Rates
Fed well behind T-Bill rates. Fed will need 0.5% rise in Fed Funds to normalize spread to T-Bill rate which is now 0.3% above FFunds.
Now “Inflation” Is A Concern?
Inflation has been associated with increases in government spending. Any change will be obvious in the 12mo Trimmed Mean PCE. At the moment the 12mo Trimmed Mean PCE remains stable.
Indicators Pointing To Continued Growth
The employment reports have again positively surprised forecasters. The Household Survey rose by 785,000. Light Weight Vehicle sales continue to hold at appropriate levels for continued economic expansion.
Today’s “Worry”: Trade War, 1929 Crash…Yada Yada Yada
The T-Bill/10yr Treas rate spread is 1.25% and mid-range today. All will be fine.
Crude: Inventory At 3-Year Low
We remain near 3-year low crude inventories.
Oil Situation - Thursday, February 22
US Production holding 10.27 mil BBL/Day. Inv dropped 1.6mil BBL with crude exports just over 2mil BBL/Day and Refined Pet Prods 4.7mil BBL/Day.
Psychology, Economic Activity And Prices
Rising/falling rates by themselves do not signal shifts in financial liquidity. It is the T-Bill/10yr Treas rate spread which is the primary determinant of liquidity.
"Davidson" & Shiller’s Data
I have used a valuation band for the SP500 on Shiller’s data which trended higher with the trend of EPS, i.e. 6.1% annually since 1933 when FDIC placed bank speculation risk on speculators, not on savers.
Oil Update
The fall in $WTI below $59 BBL is the response to those who view a higher rig count as leading to over supply.
The Fog Of Volatility
The current market volatility roils our wealth. Whenever this occurs, many believe the market is about to fail causing great permanent losses.
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