Iraq’s oil crisis could derail global economic recovery, experts caution
The Telegraph | June 11
With escalating violence jeopardizing Iraq’s oil production, analysts warn that crude oil prices could reach $130 per barrel, creating a significant threat to the global economy.
Intense conflict between Iraqi government forces and rebels poses a severe risk of disrupting oil supplies from this war-torn region, which could devastatingly impact the worldwide economic rebound, experts warn. Ole Hansen, vice-president and head of commodity strategy at Saxo Bank, told The Telegraph, “If oil production diminishes to levels seen during the last Gulf War, we could see prices increase by $20 a barrel almost overnight.”
He added, “In such a scenario, the already fragile economic recovery could be halted, possibly even pushing certain regions back into recession.”
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According to The Capital Spectator’s median econometric forecast, US retail sales are anticipated to rise by 0.2% in the upcoming May report compared to the previous month. This prediction reflects a marginally faster growth rate than the earlier 0.1% gain reported for April.
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Perfection in the market is characterized by high returns and low volatility. The S&P 500 index has demonstrated an impressive annualized total return of over 18% in the last five years, effectively doubling the long-term average. While this scenario may seem promising, it is often accompanied by predictions of a new normal in the market. History teaches us, however, that such optimistic perceptions can be deceiving, often based on fragile foundations. Market realities are framed by regime shifts, where both risk and return behave unpredictably. This creates a significant challenge, but only if investors cling to rigid expectations and inflexible portfolio compositions.
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The forecast for risk premia in the long term has slightly decreased following strong performance across most major asset classes in May. The Global Market Index (GMI)—a market-value weighted mix of major asset classes—is projected to yield an annualized risk premium of 3.9%, derived from an analysis of data up to May 2014. This figure has decreased from 4.1% in last month’s assessment.
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Can you identify a bear market when it emerges? In hindsight, this task seems simple as the signs become clear after the fact. Indicators such as price declines below moving averages and negative rolling returns are common markers of bear markets. However, recognizing the transition from a bull market to a bear market (and vice versa) with high confidence in real-time remains a complex challenge.
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● Global Macro Trading: Profiting in a New World Economy
By Greg Gliner
Summary via publisher, Wiley
Global Macro Trading serves as an essential resource for traders and investors interested in Global Macro strategies. The book outlines trading techniques and explores the four primary asset classes within Global Macro, including equities, currencies, fixed income, and commodities. Written by Greg Gliner, who has experience with major global macro hedge funds, this work offers insights into how participants in the Global Macro space profit from their investments while acting as a valuable reference.
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In May, private sector payrolls rose by 216,000 on a seasonally adjusted basis, aligning with expectations. While this increase fell short of April’s revised figure of 270,000, it marks the fourth consecutive month where job gains exceeded 200,000. Consequently, the four-month average increase (+222,000) represents the highest figure noted in over a year.
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The Labor Department’s upcoming May update forecasts a growth of 215,000 private nonfarm payrolls (seasonally adjusted) in the US, according to The Capital Spectator’s median econometric estimate. This anticipated increase is significantly less than the previously reported increase of 273,000 for April.
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The latest ADP Employment Report reveals that private-sector payrolls in May increased less than anticipated. Companies added a net of 179,000 jobs, which is below the expected 210,000 gain according to the consensus forecast. While this monthly figure is disappointing, it is noteworthy that ADP’s data shows a year-over-year growth rate of approximately 2%, indicating steady overall growth.
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The upcoming ADP Employment Report is projected to show a rise of 220,000 private nonfarm payrolls (seasonally adjusted) in May, consistent with last month’s reported figures according to The Capital Spectator’s median econometric forecast.
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