Bullish Natural Gas Services Group

One of the data points we monitor is the demand composition of natural gas. As per the most recent consumption data published by the Energy Information Agency (EIA) there seems to be a strong underbelly of demand building up at a time when prices are near a two decade low. Whether or not this increasing demand will manifest itself in to significant price gains for the commodity is entirely dependent on how fast the supply can keep up with the demand growth. To be safe, even if we assume that new supply will be able to offset any new demand and that prices will stay flat over time, the one thing we can certainly count on is an increase in the number of molecules of natural gas in the pipeline system in the US.

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Platinum, Ain’t So Precious!

Platinum has been steadily gaining its share of investment demand from precious metals investors, alongside gold and silver. As per the World Platinum Investment Council, investment demand for Platinum was 150 koz in 2014, 260 koz in 2015, and 505 koz in 2016 but the possibility of a declining industrial demand going forward will make it a tough battle for precious metals investors to continue justifying platinum’s preciousness. Of the 7,780 koz of platinum consumption demand forecast for 2017, 3,245 koz, or roughly 41%, is forecasted to come from the automotive sector (especially the diesel segment) for use in catalytic converters. This is the largest single component of platinum demand and that might be a big problem going forward.

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The Aussie Dollar, In A Checkmate!

Much of the recent optimism in the Australian dollar (AUD) seems to be stemming from one main factor: A rise in global headline inflation number suggesting a commodity price reflation. Whether or not the global uptick in inflation is just a base effect phenomenon or truly sustainable is a big debate by itself but assuming that the recent coordinated rise in global inflation expectations is sustainable and a commodity reflation unfolds I will argue that such commodity reflation might not necessarily translate into a higher AUD.

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Breadth of the US Equity Market – Where’s The Damn Towel

As much as we prefer to look at the long term behavior of the advance/decline indicator, how can you not focus on its shorter term behavior when you are long a market that’s making new highs? The health of the S&P 500 index looks terrible as measured by net advances (advances minus declines) on a daily basis. This is not a typical bull market behavior. The fact that we are witnessing negative net advances when the market is supposedly the strongest it has ever been is a screaming anomaly.

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Blackberry – Gump’s New Fruit Company

Blackberry is no longer a hardware company. The reorganization of the business has resulted in the emergence of three major business segments: 1) Software and Services, 2) Mobility Solutions, and 3) Service Access Fees. A little under 25% of the Q3-17 revenues came from each of the latter two segments, more than half of the revenues in Q3-17 came from the Software and Services segment. Their QNX business falls under the Software and Services category, and this is the business segment that’s getting me excited. Please click here for a detailed analysis.