Home Sales On The Rise

March 22nd, 2015

Share prices of Home Builder KB Homes soared 8% after a better than expected earnings report.  Chief Executive Jeffrey Mezger said there was more demand from would-be home buyers in the first quarter than a year earlier. The company sold nearly 20% more homes in California last quarter, at an average price of $550,600 — about 5% higher than a year earlier.  As one of the larger home builders in the United States, high demand and higher prices for KB Homes bodes very well for the overall U. S Housing market and the U.S. economy as well.  To view then entire article from the Los Angeles Times CLICK HERE

Now may be the time to rethink international allocations

March 19th, 2015

 

Deutsche Bank’s Foreign Exchange (FX) team forecasts that the U.S. dollar will continue to appreciate against other major currencies through 2017. As this occurs, U.S. investors with international allocations may continue to see their returns eroded by the currency effect. In their white paper on the subject, they make a strong case for a long term cyclical scenario during which the U.S. Dollar will rise against most other foreign currencies.  To view the entire white paper click this link: Deutsche Bank White Paper

7 Reasons Oil Prices Will Continue to Tumble

March 19th, 2015

As reported by Oxford World Financial Digest: Fortune magazine has run an engaging and enlightening article, written by market analysts, which argues that there are seven signs why oil prices will continue to drop. The first reason is that the world is flooded with oil. US production is near a thirty-two year high at near 9.4 mbd. Secondly, oil producers are not curtailing their output and the US is producing 14.5% more oil than this week last year, meaning supply will continue to grow. Thirdly, the demand side is flat, and perhaps falling, as OPEC is forecasting that demand for oil will hit a twelve-year low in 2017, when the world will need 600,000 less barrels of oil per day. The fourth reason is that Saudi Arabia can stand low oil prices. Because of their ultra-low cost of production (~$10) and huge foreign reserves, they are comfortable riding out this period of low prices. Fifthly, and very interestingly, oil fields are more profitable than many believe—a survey of 2,222 oil fields recently found that only 1.6% would have negative cash flow at price of $40 per barrel. The sixth reason is that many oil-exporting countries, such as Russia or Venezuela, have no choice but to keep producing oil no matter the price, as shutting off their pumps would be economic suicide. Finally, the last reason is that it is becoming increasingly hard to store oil as the US is running out of space to do so.

Netanyahu’s Speech Before Congress

March 4th, 2015

Regardless of your political stripes, this is a speech is worth watching.  It lays out the current state of affairs in the the Middle East in all its complexity and describes the risk of not getting the policies right in the region.

As much as many of us in the US would like to divorce ourselves from the Middle East, and all its problems, this speech highlights why we will always remain intimately intertwined.

To view the entire speech on the New York Times website, CLICK HERE.