Market Open

Nothing much happens on a Monday morning, normally. Today saw some movement in commodities, mainly, with other assets largely quiet. Precious metals were up (except Platinum), agricultural commodities too, and NG. Oil was down. The FT had a chart for this year so far showing oil price (pretty flat) vs the US energy sector ($XLE).

Stock markets even less representative of the real economy than in the past

Hardly a surprise, as I am sure I’ve noted before, but endorsed by Paul Krugman. Unsurprisingly, with the economy now dominated by services, which generally don’t require a lot of capital investment, the capital markets (including the equity market) is less necessary. It’s been a long time since firms raised money to invest in physical capital on the stock market. IPO’s are much more likely to be about allowing early investors (VC) to cash out (and, in the view of some, hand the paper to the bagholders).

Wrap

Somehow commodities are all weak today. This note made at 2:33GMT. Maybe things will reverse later. Canada is shut, and it’s Columbus Day in the US, so markets may not be operating normally. Equity markets seem reasonably bouncy, so this should be risk on. Bonds, as usual, are not really giving any indication of risk.

The big move today was driven by a rapid drop in the oil price. A lot of production seems to be coming online. I think Libya production has restarted. Nobody on Twitter can work out what is happening. It looks increasingly as though Biden will win the election, and suddenly this is as positive for stocks as Trump winning the election.

Stock to look at

$TEV.CA was down a huge amount today (>10%). I saw some tweets to say that this has very postive free cashflow and a large part of the free float held by insiders, which would create the possibility of a short squeeze. I know precisely nothing about this stock, so do your research!

A lot of FANG stocks were up a huge amount today: $AAPL over 6%. Most energy stocks were hammered.