MORNING 4-22

A Correction from yesterday’s Morning outlook I said oil longs were afraid to Make delivery when it should Have read Longs were afraid to take delivery because storage space is nonexistent

Oil News:

*U.S. OIL FUND TO EXECUTE ONE-FOR-EIGHT REVERSE SHARE SPLIT(bbg)

  • The CME Group said that, effective April 22, the clearing house will switch its options pricing and valuation model to Bachelier to accommodate negative prices in the underlying futures and allow for listing of options contracts with negative strikes, according to a notice – Bloomberg. The switch will be effective for the margin cycle run at the end of trading on April 22 and will remain in place until further notice. Move to accommodate a certain list of crude and energy products.(Mizuho)
  • Nigeria will cut production with or without an OPEC agreement because it has no place to store its crude – CEO of state oil company NNPC – Premium Times
  • US crude exports are collapsing. This will force even more rampant shut-ins in the Permian and Eagle Ford. Now we have Cushing hitting tank top and closed exports (HFi research)
  • Interactive brokers reported a provisionary loss of $88 Million due to several clients that blew up because of Mondays Collapse (WSJ)

Virus:

 Singapore which was a model of containment for the world to see is seeing a surge in Cases, another 1000 reported over last 24 hours. Total above 10,000 hmmm

 Some states are going to try and reopen Starting Friday, lets hop they are successful. Below is latest Number of cases  and new Deaths as of 4-21 for USA

A screenshot of a cell phone

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A screenshot of a cell phone

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 Markets:

  Stocks Higher A bit of Risk On Sentiment, Gold +1.5%, Silver +.8% Copper +1% Front month Crude Steady  after being down earlier in the day, back Month crude stronger relative to fronts. Trump threatened Iran again this morning, this is one way to push Crude Prices higher Do not sleep on front month Brent as it to trades heavy, printed $15.98 This morning. Oil will dictate flows and sentiment in Commodity complex for a day or two or a least till it settles down a bit. Spoos +1%,Dax +.6%,Stoxx 50 +.5% Mib +1.1%

   Italian Yields higher again today Yesterdays long end Saw 30 yr. yields +30 BPS, today +7 ,10-year yields +9 Spanish Yields also higher as the costs of Virus on these countries continues to increase. Italy says it will need to Double her Stimulus package. A major Joint fiscal initiative is being discussed ahead of tomorrows EU leaders meeting, Whatever the outcome More debt will be sold. Treasuries a bit heavy as Bunds Down some 60 ticks

Stock News:

Netflix lower this morning even though New subscribers much better than expected but Company said it will not last Stock ~-1%

Kimberley Clark, Cuts buy Backs, and Says tissue sales +13% AT&T Withdraw guidance but stock higher post earnings

Delta trading higher post earnings +2%

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