JAN 19. Inflations, whom to blame?
[01/19] Unlike Goldman Sachs, BOA and JP Morgan’s profit are better than estimation today for their last 4th quarter. In the morning, all main indexes were recovering fast with this news but fell back in the afternoon. Much better than yesterday but still, DJ fell 0.36%, S&P 0.18% and NASDAQ downed 0.18% today. Yield for T-Bond up again, hit the two years high and USD Index slid a bit. Inflation worries are the biggest market driven factor in this week. Like, US hit the 40 years’ high in inflations. Canadians are following, their Inflations rate hit 30 years’ high this week. Most of corporations are not earning good enough money due to the surge of those raw material cost with all expenses and healthy demand are not recovering enough either. If you need to see some numbers, let’s see, Goldman Sachs’ operating expenses were up 23% in last 4th quarter, compared to their previous period. BOA’s non-interest expenses were up 6% and JP Morgan’s non-interest expense were also up 11% in the same period of time. So, are these guys pointing out that corporations are not earning enough money because of worker’s higher expenses? Does it mean that inflations are happening because of higher wages of workers? Or at least, some responsibilities? So, bank clerks have to feel guilty from now on because of their wages were rising up from $15 per hour to $18? We’d better find out how much those CEOs, CFO’s or whatever you named board positions were getting paid at the same time. All those stop options and bonuses. Speechless… Crude oil price was up again, Brent oil futures ended at $88.44 per barrel, up 93 cents. Russia will move soon. UAE is in trouble with those notorious local people and Turkey have some issues for managing their pipelines. $100 per barrel era is not that far away.
In Ag market, everything surged big today. Based on Chicago futures market, Corn up 1.8%, Soybeans up 2.2%, soybean meals up 2.1% and wheat was up 3.6%. So, let’ see some factors… 1) No rains at all on Southern Brazil regions, more damaging on crop is possible 2) Still rumors but looks like China bought 1.7M MT of US Soybeans and 1.3M MT of US Corns. 3) Russia will bully their Ukraine neighbors anytime soon, so some possibilities of blocking black sea shipments for a while. Adding a few more points on these... 1) There are 5,000 lots of $14 CALL OPTION positions left and this coming Friday is the expiry date for SH…This is another scary option nightmare…Today’s last price for SH was $13.9125. There will be a lot of blood in Chicago this coming Friday. 2) China still has to load about 7~8M MT of US old crop corn on books and they bought another 1.3M MT of US new crop CORN? UNCERTAINITIES ARE BULIDING UP DAY BY DAY in this market.