BNN's mid-morning market update: May 16, 2017
On BNN today, we’re weighing the Russia-related news out of Washington and its impact on your investments.
U.S. President Donald Trump is said to have shared classified information with Russian officials. According to the Washington Post, officials said “Trump’s disclosures jeopardized a critical source of intelligence on the Islamic State. The information the president relayed had been provided by a U.S. partner through an intelligence-sharing arrangement considered so sensitive that details have been withheld from allies.”
The latest Trump rumpus doesn’t seem to be worrying investors. Equity futures have been pointing to a higher open after the S&P 500 and the Nasdaq posted record closing highs yesterday.
FOLLOW THE MONEY
At 9:40 a.m. ET, segment producer Rob Graham has lined up perspective from some big money. We’ll get a market outlook from Scott Wren, senior global equity strategist at Wells Fargo Investment Institute, who helps oversee US$1.8-trillion in assets.
At 10 a.m. ET, we look at Trump’s impulsiveness with another reality TV star: Canadian businessman Robert Herjavec, a panelist on the TV pitch show Shark Tank. Herjavec struck it rich in internet security technology so segment producer segment producer Michael Chu is also hoping to get his take on the cyberattacks that have hit tens of thousands of companies and organizations in 50 countries since Friday.
IN THE BALANCE
The International Energy Agency has some vaguely heartening analysis for oil bulls today, arguing that re-balancing in the crude “market is essentially here and, in the short term at least, is accelerating.”
But the group, which represents energy consuming nations, warns that even if OPEC sticks with its production cuts for the rest of the year, “stocks at the end of 2017 might not have fallen to the five-year average, suggesting that much work remains to be done in the second half of 2017 to drain them further.”
On Commodities at 11:05 a.m. ET, we’ll hear from an energy market analyst who worked for Saudi Aramco, the world’s biggest crude exporter - and now has a decidedly bearish outlook on prices.
Fareed Mohamedi, chief economist at Rapidan Group, warns that relentlessly climbing stockpiles will weaken OPEC compliance with cuts and push oil “into the $30s” by the middle of 2018.
“Our base case assumes unity will fracture, restraint will ease, and prices will plummet,” he tells Commodities producer Mike Attenborough.
Mohamedi predicts the “price bust will drastically slow investment in U.S. shale and curb production post-2018. After prices in the low US$30s inflict a lasting toll on US output, OPEC will cut significantly… lifting prices back in to the US$50’s in late 2018.”
Finally, we’re still churning out Canada’s best coverage of the housing market and the risk for investors. Michael Hainsworth talked yesterday to new Home Capital (HCG.TO) director Alan Hibben, who said the beleaguered lender won’t need emergency funding from the Bank of Canada.
Every morning Commodities host Andrew Bell writes a ‘chase note’ to BNN's editorial staff listing the stories and events that will be in the spotlight that day. Have it delivered to your inbox before the trading day begins by heading to www.bnn.ca/subscribe.