Maverick EnergyToday the market is off to the races after Exxon’s earnings for Q1 rose 38%, helped along by the recovery in oil prices. This as well as sharply higher equity futures are pushing energy values higher, looking to test $85 in oil today. The dollar index is weaker as the prospect of an EU bailout for Greece got a boost from fast-track approval from Germany, the major player in the region. This is politically very difficult for them, and it will be interesting to see if they write the check and under what conditions.
Initial jobless claims also fell 11,000 to drift below the 450,000 level, its lowest reading in 4-weeks. The trend is definitely better, but it will be the April unemployment report at the end of next week that will really drive the market’s economic sentiment.
Today sentiment is decidedly positive, and with equities higher, the dollar lower, and the macros (while bearish) giving some a reason to be bullish product demand moving forward…..the markets are trending notably higher and trying to get back toward the highs for the year that they’ve consistently failed to take out.
Oil volatility over the last 50 days is the lowest since July 2007. Does that mean we’ve found equilibrium? Doubtful, but what isn’t is the impact of $3 retail fuel on business and consumers moving forward. Overall the market is still range-bound and continuing to take its cues from equities.