The Global Market Cave-In and Where People Are Hiding

European markets caved in 3.5 % to 16-month lows on fears of further ECB rate cuts;and US stocks followed suit with the S&P 500 slipping 1.42% as falling oil prices and Fed rate increase worries,as well as the overseas weakness,rattled investors on Monday.Concerns are that,in a climate of negative interest rates in Europe and Japan,and prolonged dovish monetary policy,banks' profitability will be squeezed,said Jaisal Pastakia,investment manager at Heartwood Investment Management.According to Michael Bell,global market strategist at JP Morgan Asset Management,the market is pricing in a 50% chance of a European recession.
Both Brent crude and light sweet crude fell about 2.5% Monday,with Brent closing at 33.20 bbl and light sweet crude subsiding to the 30.12 mark.As for the safe havens,London spot gold peaked at 1176.66 an ounce at 1104 GMT,an increase of 0.3% on top of last week's 5 % gain;while NYMEX April gold settled up 3.5% at 1197.00 an ounce,and silver climbed 0.32% to 15.36 an ounce.*
Ian Taylor,CEO of Vitol Group B.V.,the world's largest independent energy trader,believes oil will stay low for the next 10 years.Brent crude will close the year out at 48.00 bbl,Mr.Taylor predicted.The Rotterdam,Netherlands company ships more than 270 million tonnes of crude a year in its fleet of 200 supertankers and other ships.*
Gold has made a spectacular move the past 20 days,said Frank Holmes,CEO of US Global Investors.World trade is still in negative territory,and negative real interest rates are helping gold.As well,there is a strong physical demand for bullion worldwide.US gold coin dealers had their second-best year ever in 2015,despite the price of gold having declined last year.I think it's going to continue to do much better this year than last year,unless some catastrophe happens around the world.China needs to back 3% of its currency with gold,buying all new mine supply.I think 1100 an ounce is the floor price,and it could easily go to 1500 and ounce,Mr.Holmes projected.*
We think there is more upside,said ETF Securities analyst Martin Arnold.The next big level is 1200,but it may take a while to test it.*
The rare stocks that did well in the Dow Jones Industrial Average included Exxon Mobil;Chevron;Apple;Procter&Gamble;and Johnson&Johnson.*
Exxon Mobil (XOM);Apple Computer (AAPL);Procter&Gamble (PG);Johnson&Johnson (JNJ);Chevron (CVX);iShares MSCI Global Silver Miners ETF (SLVP);iShares MSCI Global Gold Miners ETF (RING)

Looking At Big Oil In Light of Crude's Price Increase

Since oil prices bottomed on 17 March,closing at 43.88 bbl for NYMEX crude and 53.94 bbl for Brent,analysts have been re-examining oil industry profit forecasts for Q2,raising the estimates as prices climbed back up.Now they are calling for 20% higher profits on average.Shares of most oil industry stocks are predicted to rise 17% over the next 18 months.
For example,oil services firm Transocean has an earnings estimate that has been raised a hefty 80.9%;while Exxon Mobil's has been raised 13.7 % and Chevron's earnings estimate has been hiked 8.7%.Transocean stock is considered overvalued at this time,so it has an average analysts' recommendation of underweight.Exxon has an average recommendation of hold with a price target of 94.35,and Chevron has a hold rating as well and a price target of 113.20.
Transocean has exceeded its price target of 14.19;while Exxon and Chevron are still below theirs-they have room to climb.On the dividend front,Transocean pays 0.85%;Exxon 3.49%;and Chevron leads the pack with a 4.31% payout.*
Today,15 June,NYMEX crude closed at 59.61,and Brent at 62.70.Transocean stock closed at 17.61;Exxon at 83.72;and Chevron at 99.29.All three stocks,as well as crude oil itself,were down on the day from Greek default fears and an oil supply glut.While Transocean stock has risen sharply since the price of oil bottomed out on 17 March,rising from 14.02 up to today's 17.61,Exxon's stock has been flat and Chevron's has declined 3.2%.Only Transocean stock has responded to the oil price climb as of yet,but to the point of rising too much.*
Transocean (RIG),Exxon Mobil (XOM),Chevron (CVX)

Trading Kingdom:CME Group Focused On Growth

Craig Donahue,CEO of CME Group,a family of four designated contracts markets,is a believer in consolidation of markets.Most of us are operating globally,he says.We have 150 countries trading on our platform.
The CME Group maintains trading floors in New York and Chicago,where the old open outcry trades are still performed alongside silent electronic ones.Stock and commodities futures and options,as well as foreign currencies,or forex,change hands at great speeds and big volumes.These trades both build portfolios and manage risk.
We are very focused on our core business.We have really great,compelling growth opportunities in our core business.We have been very focused on globalization for years.Consolidation and efficiencies are obviously important to investors and the industry.
We have such a large amount of customers in Europe and in Asia.We really believe in our growth opportunities as a company.We're continuing to really build out our platform.We're already operating different regulated entities.We're regulated in Europe.It's not really a barrier.
The idea of hedging and transferring risk is still relatively new.We innovate new products all the time to meet those needs.The futures and derivatives markets have been more global for 15 years.It's prone to more growth.People have global demand for forex,commodities,energy products.
We're focused on the emerging markets and see opportunities there.We'll continue to see strong growth.Commodities,forex,metals still have strong growth opportunities.We still have a large number of exchanges in the emerging markets not open to mergers and acquisitions.
Mr.Donahue is not a believer that we've seen the end of M&A in the financial markets.
CME Group consists of the CME,COMEX,CBOT and NYMEX exchanges,utilizing the Globex electronic trading platform.The acronyms stand for Chicago Mercantile Exchange,Commodities Exchange,Chicago Board of Trade,New York Mercantile Exchange.These complex markets are now more accessible to retail investors,as exchange traded funds provide easier access to their financial instruments.
CME Group(CME)

Advantage View:Evaluating This Bull Market

We are seeing bullish sentiment extremes,and this shows that the bull market is unsustainable,according to Walter Zimmerman,Chief Technical Analyst at United ICAP.We are likley to see the highs for the year this month.Be wary of any sudden moves to the downside.
Everyone is long,waiting for the next rally.Everyone is already in the market.All the mergers are also a sign.It's not just individuals that are bullish.Historically,market tops have been marked by big financial mergers such as the recently announced Deutsche Boerse-NYSE/Euronext or the CME-NYMEX tie-ups.
United ICAP is a technical advisory service and inter-dealer energy broker.It provides analysis to the energy industry,as well as the average trader and investor.