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The “Big LNG Short”

Friday October 4, 2019

In the latest edition of the Numbers Report, we’ll take a look at some of the most interesting figures put out this week in the energy and metals sectors. Each week we’ll dig into some data and provide a bit of explanation on what drives the numbers.

Let’s take a look.

1. U.S. manufacturing activity plunges

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• Oil was ensnared in a global selloff midweek after fresh data pointed to a sudden and sharp contraction in U.S. manufacturing activity.
• The Institute for Supply Management said that the manufacturing PMI fell to 47.8, the worst reading in a decade. Anything below 50 means a contraction in activity.
• Global equities sold off, as did crude oil. The U.S. economy has been relatively healthy throughout 2019, despite a significant deceleration in China, Germany and elsewhere.
• Manufacturing is still a relatively small slice of the economy at around 10 percent. But if it bleeds over and leads to declines in consumer spending, the U.S. could be heading for a recession.

2. Palladium prices stay aloft

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• Precious metals have lost quite a bit of value over the past month, but palladium has fended off the price correction and has stayed aloft.
• It’s not clear that defying gravity can last.
• “Because palladium has held its own better than any other precious metal and has declined…

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  • Jeff Lawrence on October 05 2019 said:
    ISM data led only 1 of the last 6 US recessions. It lagged (badly) all other recessions. It also predicted many recessions that never happened. It is kinda interesting but not useful in the absence of other data. Next...

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