On Monday while in a Zoom study group meeting, an Oil Futures contract expiring on Tuesday went negative ….
What?
Yep … in theory, had you bought one of those Futures contracts (there were about 100k open interest), you would be the proud owner of 1000 barrels of oil, AND the seller would pay you to take his oil….. the only issue, you need some place to store it!
What do you say when someone says they will give you their oil? Sorry, No TANKS!
Being forever market nerds … when the contract went negative about 5 different alerts hit my vision and Donald “The Brain” texted within about a minute… Digressing…
Interesting Chart of the Events, Stay Tuned
Take note of the cost to store oil, late in this chart ! Hence the reason to “Pay” to get rid of the oil, plus the possible cost to shut the rig down….
Enjoy!
Of course from our friends at Visual Capitalist…. Well done guys!
Have a Great “Free Oil” Day!
John A. Kvale CFA, CFP
Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
jkfinancialinc
street-cents
The Fed, Economics, Interest Rates and Interest Rates Review Part 1
On Friday, we gave you a preview of this post and in completing it over the weekend, it became a bit longer than expected, so we are doing a two part series.
Some of this is also in our coming Newsletter, but with more turf here, we can dig a little deeper, especially in a two part series…
Mid week last week the FOMC (Federal Open Market Committee) led by Jerome Powell and company released their estimates of where interest rates will be over the next several years.
This chart, known as the Fed Dot Plot, represents a dot for each voting member …. looks like there is a ton of group think going on as everyone is pretty much in agreement on the near term view and with a variance of only one percent in the longer term view – far right (One vote at 2% and two at 3%)
This chart from our Friends at JPMorgan includes not only the FOMC estimates but what the Capital Markets are assuming – (This estimates comes from the Futures Market and is easily ascertained)
Market estimates can and do change quickly.
Here is a blow up of the far right portion of the graph – Orange is market expectations again from the futures market and Purple is long run assumptions.
So markets think that rates will stay low and the FOMC also agrees.
Is there any reason that the FOMC would HAVE to raise rates?
Yep, one word ….
Inflation!
In Part 2 we will discuss …
Have a Great “FOMC and Interest Rates” Day!
John A. Kvale CFA, CFP
Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
jkfinancialinc
street-cents
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Posted in Economy, FOMC, Forecast, Interest Rates, Investing/Financial Planning, Market Comments
Tagged FOMC, Futures, Interest Rates, JPMorgan