It’s all about the weather … at least for select investments. Get a load of beaten-down natural gas, for instance. Futures prices surged by almost 10% on Monday alone. The fuel is now up by almost 30% in only six days, one of the fastest blink-of-an-eye bull markets I have ever seen.
Market Roundup
Granted, that came off a low base. Nat gas just sank to its lowest since 1999, after all. But for investors in this beaten-down commodity, they’ll take what they can get. Industry execs and workers could also use a break, considering the nat-gas-drilling rig count just sank to the lowest level ever in 28 years of record-keeping.
The chillier temperatures we’re seeing could also give retailers a break. They’ve been lugging tons of cold weather inventory and have been forced to discount like mad during the holiday shopping season. Anything that allows them to reduce post-Christmas clearance discounts will be welcomed.
Airlines weren’t loving the latest bout of rain, sleet, snow and high winds, though. Major airport hubs like Dallas and Chicago got socked, forcing 2,750 flight cancellations and 4,500 delays yesterday, according to FlightAware. I guess I should consider myself lucky as I won’t be on my way to Chi-Town until Thursday!
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| Stormy weather has meant good times for some business sectors. Can it continue? |
The question going forward is whether the weather will continue to cooperate with these kinds of investments. Some forecast models suggest January will provide a bit of relief to those hungering for a real winter. But with the strong climatologic influence known as El Nino still raging, above-normal temperatures are generally expected to persist for the northern part of the country through the spring.
So enjoy the cold if you’re making snowmen. But don’t go out and load up on energy stocks, retailers or companies that own ski resorts expecting a banner winter from here on out. Instead, pick and choose your spots and make sure you’re investing in companies that have more going for them than a few days of freezing temps.
What do you think of the latest weather? Welcome relief or a major headache? Are there companies you’re considering investing in given the latest pattern shifts? Have you ever done so in the past when we’ve seen significant weather events? Or do you stay focused on other factors when it comes to buying and selling stocks? Hit up the comment section below and have at it!
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The end of an old year and the beginning of a new one always brings forecasters out of the woodwork. I’ve done my best here in Money and Markets to give you some general guidance, and readers of my Safe Money Report are about to get much more specific, actionable ideas and recommendations when my 2016 forecast issue is released. In the meantime, several of you weighed in on the outlook for the coming year overnight.
Reader Doug C. said: “Hopefully as 2016 begins, we will find a way to get an economy churning on the last embers of a burnt-out Middle Class. We need new, creative approaches which will allow us to increase consumer spending in the economy, which will hit almost every industry with its exhilarating effects.
“We need to work with new ideas and maybe we can get the whole ecosystem firing on all cylinders. New awareness for the new year.”
Reader Howard added: “We need a catalyst to give direction to this aging bull market. What will it be, when will it come, and who will be prepared? Who will be surprised?
“Many Middle Class retirees with modest investments have been forced into seeking higher yields because of controls on interest rates and rigged capital markets. Many of these battlers don’t have a seat at the decision-making table, and my fear is they will be caught again with a capital loss.”
Reader Art A. sounded an optimistic note, saying: “I stand by the old saying ‘Don’t fight the Fed.’ The first increase in the fed funds rate (25 basis points) is nothing. If we get a few more, the message will be different.
“I’ve been watching the markets for a long time. Show me where the market topped out on the first rise in interest rates. It doesn’t happen. Also, the Fed continues to roll maturing Treasuries into new Treasury purchases.”
But Reader R.Y. expressed an opposing view, saying: “The junk bond market is now the tail wagging the dog. As positions are ‘attempted’ to be unwound, and more bonds are downgraded, the flight to cash will first pressure these bonds, and then stocks in a massive way. The Fed will be powerless to stop it.”
Thanks for sharing in these turbulent and uncertain times and keep the discussion going by adding any additional comments below.
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Belgian officials arrested or detained six potential terrorists in the past 48 hours, saying they were planning holiday attacks in the city of Brussels. The attacks were reportedly aimed at police and military personnel, and were not linked to the deadly attacks in Paris several weeks ago.
Home prices rose 5.5% year-over-year in October in the top 20 U.S. metropolitan areas, according to S&P/Case-Shiller. That was roughly in line with economist forecasts. Western cities like San Francisco, Denver, and Portland, Oregon led the pack with gains of almost 11%, while Chicago brought up the rear at just +1.3%.
Billionaire activist investor Carl Icahn must really need some auto parts, because he just raised his bid for Pep Boys (PBY) to $18.50 per share. That was $2 higher than his original offer, and $1.50 above a competing bid from Japanese tire company Bridgestone.
Is your house rising in value, and are you taking advantage of that by selling? Or are you holding out for more? What do you think of Icahn’s latest takeover bid, and the surge in M&A we’ve seen in the past year overall? Will Europe see more terrorist attacks, or are officials there getting a handle on things? Share your thoughts on these or other topics at this website.
Until next time,
Mike Larson
P.S. Gold, silver and oil are bottoming right on schedule just as Larry Edelson predicted they would — all in preparation for a powerful bull market in 2016.
Click this link to read more about Supercycle Trader, but hurry! Enrollment could close at any moment, as we are rapidly approaching our membership limit!
Mike Larson graduated from Boston University with a B.S. degree in Journalism and a B.A. degree in English in 1998, and went to work for Bankrate.com. There, he learned the mortgage and interest rates markets inside and out. Mike then joined Weiss Research in 2001. He is the editor of Safe Money Report. He is often quoted by the Washington Post, Reuters, Dow Jones Newswires, Orlando Sentinel, Palm Beach Post and Sun-Sentinel, and he has appeared on CNN, Bloomberg Television and CNBC.
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i can’t help but to believe that large nat. gas pipelines will do fairly well in the future. its similar to playing pool for an hour, and someone loses and someone wins, but it the end the guy who owns the pool table has got to be paid. same with the pipelines, no matter where the gas goes they have to pay the pipelines to get there. and the price seems to be right to start buying at a large discount.
Wait ’til they get their export terminals built. Maybe our balance of payments will improve a bit.
I don’t think anyone disputes the business model. It’s a toll business with long term contracts. Can they still grow, pay dividends, and service their debt load without access to cheap credit? Jim
Weather. Here in the mid-Atlantic, my December gas and electric bill was more than $40 les than last year’s. Cherry blossoms have been blooming already along the Potomac. We have had a little more rain than normal, but nothing like the biblical downpours in the South, Southwest and mid-America, not to mention the out of season tornados. Lowes and Home Depot must be doing land office business In those places, which should be good for their stocks – if their stores survive. And if anyone really wants to rebuild there. Our turn may be coming, temps below freezing, and more rain predicted. Maybe some sleet or light snow. We’ll live with it.
My rental condo is rising in value to the point where I would like to sell but at the same time loan qualification standards have risen to the point where the people who are renting can not qualify for what would be a lower payment if they were buying. Something is out of balance here.
On the other hand, this might be a good time to sell, while interest rates are still low, and buyers are active. When rates and prices rise, the market could fall somewhat, with lower values for your property.
A bird in hand is worth two in the bush.
Tells me another real estate bubble is forming …
Two points today. !. The Federal Reserve DOES NOT control interest rates, markets do! 2. Times are ALWAYS turbulent and uncerntain!,
they completely control the fed funds rate.
I posted the comment alluded to Reader R.Y. yesterday :>(
Re Carl Icahn’s bid for Pep Boys: With our infrastructure falling apart and the pothole index way up, auto parts would seem to be a wise bet.
Mike Larson,
Actually the El Nino is crashing and the effects of that will be starting to kick in. You need to check Weather bell and other sites that have noted this.
I am retired vet on s/s and what I can make as a short story/article freelance writer.
I would like to invest in Natural gas , propane retailers ,railroads & Tanker trucking firms.
Can modest monthly amounts invest by himself(I know little how or do I have to use a
broker ? I want to leave stocks to my son and future wife. Am I spitting into the wind ?
Thanks. (like your web site & Merry Christmas too)
Your retired forget investing. Move to Thailand enjoy life what there is left of it. Get yourself a young g/f and live the good life. You made it and I am sure your son and future wife can as well.
Forget Thailand, its a mess, better Philippines, Indonesia or Vietnam, good retirement places all. Military junta in Thailand are trying to destroy that country and are likely to succeed.
Uruguay! Jim
I noticed, in Martin’s ratings of countries, he left out all of South America, except Chile and Uruguay.
I live in Vietnam; very nice if you do not mind climbing stairs in row houses or living in high rise apartments.
Cant get a handle on todays question? Great article though and looking forward to more like them. If weather influenced nat gas investment decesion..? No not here. Most influx of capital happens springtime for short gain and summer retrievel so without unforseen summer freeze I doesnt. Now if youre taking future s of softs then Im wondering why it wouldnt and since I dont and stopped with the short term trade long ago kust wondering exactly what the question would be …?
Glen and Gordon on your way through Asia picking up a partner get a visa and both come to Australia we have the best Medicare and welfare in the world plus weather
Wait until they get their export terminal built.
Michael,
Happy New Year! Good points regarding the weather and investments. HOWEVER, given the massive amounts of worldwide debt and the massive amounts of worldwide deflation, the weather is simply NOT a big enough factor to effect the capital markets at this time. The problem is all the Debt, and Larry Edelson puts it clearly: $12 to $15 Trillion in worldwide central bank fiat, money printing over the last 7 years has been NO match for the over $400 Trillion in worldwide Debt obligations….watch out below!!!.
I do believe that a home foreclosure can have a significant effect on the borrower’s life. House foreclosures can have a 8 to a decade negative affect on a debtor’s credit report. Any borrower that has applied for a mortgage or any loans as an example, knows that your worse credit rating is usually, the more difficult it is to acquire a decent financial loan. In addition, it could affect any borrower’s power to find a respectable place to lease or rent, if that will become the alternative houses solution. Great blog post.
real estate investing https://pt.wikipedia.org/wiki/File:Mortgage_Loan_graphs.jpg
It’s my opinion that a property foreclosures can have a major effect on the borrower’s life. Mortgage foreclosures can have a Six to decade negative influence on a debtor’s credit report. Any borrower that has applied for a home loan or virtually any loans for that matter, knows that a worse credit rating will be, the more challenging it is to have a decent personal loan. In addition, it can affect any borrower’s power to find a respectable place to lease or hire, if that gets to be the alternative houses solution. Interesting blog post.
mortgage loans https://sc.wikipedia.org/wiki/File:Cash_payment_timeline_on_foreclosures.jpg