// or when the Rig Count will drop //
I think you have to be careful with the rig count, though I'm sure that reduction story will be pushed. From what I understand, different rigs produce different amounts and some fields are just better, so what is reduced is probably more important than the number ... it just isn't linear. We'll see how the reporting goes.
I'll gladly accept $60-70 oil, but frankly I don't think anyone knows what the proper price should be after a decade plus of deregulated commodity swaps that were ripe for manipulative speculation mispricing things. Commodities look to the futures market for price discovery. Price allocates resources. You screw up that system ... and who knows? One thing for sure, you don't have an efficient allocation of resources ... which brings us back to what you were saying. Regardless, I think this is a huge positive for the economy. The perplexing economic past may be starting to crumble.
What do you look at to tell a large fund is buying ... ? Even when I buy or sell something it is broken up into small lots. If you look at volume, how can you distinguish between HFT and a fund?
I'm trying to figure out what the market is worried about ...
When I listen to many of the financial talking shirts they seem to think that there will problems withdrawing the liquidity from the economy when the time comes (their words). Just by using the term "liquidity", leads me to wonder if they really understand the QE's in the first place. In my mind if the QEs are reversed, it will only be done if there is no impact on liquidity. Sure the Fed will have to finesse it, but it can be done.
In my mind, the Fed will withdraw the printed money from the QEs only if the velocity of money picks up. If that way, the money supply will stay the same. So, what's the problem?
Do they feel if the Fed withdraws, that will raise the long end of the market and liquidity from QEs in other parts of the world would flow into here? Would that even be a big problem? Well, I did say the Fed has to finesse things.
Anyway ... where are the worries coming from?
I was just saying that I'm not a healthcare professional. So don't think I know what I'm talking about. But there are some in my family that are in healthcare and I pick up on things listening ... so my advice is probably a little worse than dangerous.
Well, glad your allergies are light, but still be careful since, I believe, they can develop into something worse if not watchful. But one thing I'm not and that is a healthcare person ... just have some in the family.
unc, oil did jump just after 2. And then all airlines dumped. Some airline trading algos must have picked up on the oil. Isn't that just our luck? Get great new fundamentals on the airlines with jet fuel down big, and we have to put up with the way the "old algos" are written to trade airlines. Just can't find good help these days.
I think peanuts are beans (legumes), and nuts are nuts. But it is entirely possible being allergic to a lot of things your are told to stay away, avoid certain other foods to be safe. And I'm sure to cover all the bases, people are told to avoid both.
Thanks, unc ... I stand corrected. Didn't check, just assumed by the time of month and price action ... that's what assume does.
// Hard to see green today with oil on the rebound today //
Oil just rolled to the Feb contract ... price jumps like this every month.
Earning estimates have been coming down, so I think there was some doubt.
It's amazing the way a bunch of airlines can dump at the same time ... someone pushed a button at 2:30 on a bunch of them.
No need to be sold on $13 ... it's just on the higher end of estimates (obviously). In the merger prospectus, AAL projected $4.3 billion in 2015 with high oil ($3.7 billion in 2013 which they beat ... they can meet $4.3). A $1.20 drop for all of 2015 ($1.80 jet fuel) from high fuel gives $13.30 when added to the $4.3 billion ... knock off the extra 4% from the contracts in labor costs.
Cut that savings in half and this puppy is still way undervalued.
I agree unc that you want to see PRASM growth, and that will come with economic growth. At this point there a resetting of the point that growth will happen. It's not often that a company (industry) resets its "no growth" profit level by 50-100%. When economic growth and PRASM growth occur, maybe the airlines will get something higher than a "no growth" PE.
I feel, PRASM on continuing operations (ex-comparison YOY on Venezuela) is in-line with all the other carriers generally. AAL has been telegraphing the Venezuela problem for months. In the monthly report, AAL did drop midpoint PRASM 1%, but dropped costs greater than 1%. With fuel dropping everybody and their uncle (not you unc, but you have too) has been going over what it means for airlines going forward. I don't think earnings will matter that much if there is a slight miss ... there is just too much short term noise. More important will be the forward outlook that everyone is expecting to be good.
One retail report gave the combined Nov-Dec sales (T-day situation) and they were up 4% (unless I misread the number). Considering that people probably jumped on early Nov sales (did retailers panic?), if retail gasoline was in that report, things looked fairly good to me.
unc ... my eyes see $1.51 on yahoo ... lines up with the others you mention ... that's better
Market has a mood problem it seems. We're 2 1/2 weeks into this pullback. Sometimes they last 2-3 weeks, and sometimes the longer ones go 4-6 weeks (or something in between ... I really don't know). It is options week ... have to see how this plays out.
// let's see how the analysts come down on this one. //
McAdoo of Imperial Capital came out with a 2015 eps estimate of $13/share for what it is worth.