What’s the weather forecast?
The weather forecast for October 3 to October 9, 2016, indicates that temperatures in the United States could remain higher than the five-year average for the period between October 3 and October 6. For the remaining days in the week, the temperature could fall sharply below its five-year mean. Between October 3 and October 9, the temperatures could start to cool.
El Niño anomalies
Natural gas use for heating during the 2015–2016 winter season was low due to mild weather. El Niño kept temperatures warmer than normal. As a result, at the end of March 2016, US natural gas inventories were at 2.5 trillion cubic feet, which is 67% higher than levels in 2015 and 53% higher than the five-year average.
In the week ending September 30, 2016, temperatures were higher than forecasts. Natural gas futures fell 3.6% for that week.
On September 29, 2016, the EIA (US Energy Information Administration) announced a 49 Bcf (billion cubic feet) addition to natural gas inventory levels in the week ending September 23, 2016. The market had expected an addition of 57 Bcf to the inventory, according to a report by the Wall Street Journal.
The effect on ETFs
The above analysis could be important for natural-gas-tracking commodity ETFs such as the ProShares Ultra Bloomberg Natural Gas ETF (BOIL), the Direxion Daily Natural Gas Related Bear 3X ETF (GASX), and the Direxion Daily Natural Gas Related Bull 3X ETF (GASL).
In the next part, we’ll take a look at the recent impact of crude oil on the S&P 500 Index (SPY) (SPXL).
Crude oil’s (UWTI) (USO) (OIIL) (USL) (SCO) (DWTI) implied volatility was 35.3% on September 30, 2016.
Broadcom (AVGO) stock fell ~8.5% after markets closed yesterday following the semiconductor giant's fiscal 2019 second-quarter earnings release. It missed analysts' revenue estimate and cut its fiscal 2019 revenue guidance by $2 billion to $22.5 billion due to sluggishness in its semiconductor solutions business.
The SPDR Gold Shares ETF (GLD), which tracks physical gold prices, has underperformed the broader markets year-to-date, rising just 4.4% compared to the S&P 500’s (SPY) gain of 15.9% as of June 14. The sentiment for gold, however, has been turning around.
Safe havens such as Treasuries and gold were back in favor on June 14 as stocks fell due to rising tensions in the Middle East, concerns over growth, and the looming threat of the US-China trade war. The tech-heavy Nasdaq Composite Index fell 0.67% in the first hour of trading.
Lululemon (LULU) stock rose 2.1% on June 13 in reaction to better-than-expected first-quarter results and an upgraded outlook for fiscal 2019 overall. The company's first-quarter adjusted EPS grew 34.5% to $0.74 on revenue growth of 20.4% to $782.32 million. Analysts had expected EPS of $0.70 and revenue of $755.31 million. Here's why the outlook got an upgrade.
As of 4:40 AM Eastern Time today, US crude oil active futures were at $51.83, ~4% below their closing level in the previous week. If US crude oil prices stay at those levels today, they'll mark their third week of decline in five weeks.
Kimberly-Clark (KMB) stock has risen 20.5% this year, boosted by the company’s better-than-expected sales and earnings during its last reported quarter. However, its stock could stop climbing. Here's why.