Here Is Your "Global Recovery" In 24 Charts

No, this is not a joke: this is, sadly, the big picture of the "global economic and profitability recovery."

Source: JPM

Polar Vortex 2.0 Arrives - All 50 States Will Freeze Tonight

3 months ago we warned US economic growth faced a challenge more powerful than any Fed-sponsored miracle could handle and 3 weeks ago Yellen's worst nightmare began to loom on the chilly horizon. But tonight, from the depths of the night, the cruel monetary-policy-nullifying devil of Polar Vortex 2.0 arrives as all 50 states (yes even Hawaii) will see temperatures drop below freezing...

On the bright side, companies will have more than just strong dollar and weak foreign growth to blame for earnings weakness... weather is back baby!!

h/t @Met_mdClark

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Just one thing for those celebrating the drop in gas prices at the pump as some tax cut for the consumer(which it is not - it merely allocates the same aggregate spending dollars from gas to a different consumable - leaving aggregate spending just the same - or less in fact should consumers, as in Japan's balance sheet recession, choose to minimize debt as opposed to maximize profits or living standards with their extra cash)... this is what happened to home electricity bills last year... (now is that a tax hike for the consumer?)

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Now, the only question is how the resultant tumble in Q4 GDP will be used by the Fed and econo-pundit talking heads to justify a further delay in rate hikes, which consensus expects to take place in Q2 2015 at the latest as a result of recent seasonally massaged "strong data", or better yet, force the Fed to resume liquidity injections once it is revealed that the ECB's intervention is limited to verbal jawboning, while Japan's runaway import cost inflation and plunging real wages lead to a revulsion against Abenomics and Abe in 2015, and a premature end to Japan's epic hyper-reflation experiment and the best laid plans of Goldman Sachs to boost "risk assets" and Goldman year end bonuses.

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BofA Is "Growing Concerned", Options Are Signalling A Stock Market Correction Looms

"We are growing concerned about the potential for a pause or near term correction in the S&P500," warns BofAML's MacNeil Curry, as the options market flashes a warning to US equity bulls.

S&P500 volatility warns of complacency

We are bullish stocks, with the S&P500 targeting 2080/2100 into year end. However, in the near term, equity volatility warns of complacency and the POTENTIAL for a correction. Specifically, the VXV/VIX ratio (VXV is the BBG ticker for 3m SP500 Volatility) has reached levels that have often led to a market pause/correction.

While such a pullback would ultimately be corrective, BE ALERT.

 Source: BofAML

S&P 392 Weeks

Oil Plunges As Saudis Dismiss Price War "No Basis In Reality"

WTI Crude oil prices tumbled to a $75 handle this morning as Saudi oil minister al-Naimi dismissed claims of a price-war as having "no basis in reality" noting that "Saudi oil policy has remained constant for the past few decades and it has not change today," suggesting expectations of a supply cut at the looming OPEC meetings are overdone. This comment comes after Qatar said it "may" cut output by 500k barrels/day.

As Bloomberg reports,

Saudi Arabia’s oil minister dismissed talk of a price war as having “no basis in reality” in his first public comments since crude plunged into a bear market last month.

“Saudi oil policy has remained constant for the past few decades and it has not changed today,” Ali al-Naimi said at a conference in Acapulco, Mexico, yesterday. “We want stable oil markets and steady prices, because this is good for producers, consumers and investors.”

“Talk of a price war is a sign of misunderstanding -- deliberate or otherwise -- and has no basis in reality,” al-Naimi said at a natural gas forum. “Saudi Aramco prices oil according to sound marketing procedures -- no more, no less.”

India back to being world’s top gold consumer

India reclaimed its world’s top gold consumer crown from China as demand for jewellery surged almost 60% in the third quarter of the year, fresh data from the World Gold Council (WGC) shows.

Global demand, however, fell to its lowest in nearly five years as Chinese buying slid by a third and gold jewellery, the biggest single area of consumption, dropped 4% to 534 tonnes.

Overall, the south Asian nation —which had lost his position as the world’s No.1 gold consumer to China in 2011—bought 39% more gold in the run-up to Diwali and the start of the traditional wedding season.

The WGC said that a weakening of gold prices in rupee terms had boosted demand in India, and that confidence in the new government led by Narendra Modi had also contributed to the rise.

The increase in Indian purchases is more marked because demand for gold in the same period in 2013 was particularly weak, due to government restrictions on gold imports designed to limit the country's current account deficit.

“It is now beyond debate that import restrictions have had little impact on the demand for gold and yet have strengthened the unauthorized supply channels,” according to WGC India’s Managing Director P.R. Somasundaram.

Gold smuggling into India has skyrocketed since the government ratcheted up restrictions and taxes on legitimate imports of the precious metal. According to the council, about 200 tons of gold came through unofficial route last year and a similar quantity is also expected this year.

WGC Managing director of investment strategy Marcus Grubb noted the fiures for India and China this quarter reinforce the need to understand the factors which underpinned an "exceptional Q3" last year.

"People around the world buy gold for different reasons at different times, reinforcing the unique self balancing nature of the gold market. With recycling at a seven year low and mine supply looking increasingly likely to be constrained in the future the outlook for physical gold demand remains strong,” he said in today's statement.

Key findings from the report:

·         Jewellery remains the biggest component of gold demand, representing more than half of all demand at 534t, which is 4% lower year on year. Jewellery demand was driven by India, which increased 60% to 183t. UK and US demand was also strong. Chinese jewellery demand fell 39% to 147t as the jewellery market caught its breath after an exceptional year for demand last year.

·         Central banks bought 93t of gold in Q3 2014, 9% lower year on year, but the 15thconsecutive quarter that banks were net purchasers of gold.

·         Investment demand (bars and coins and ETFs) was up 6% to 204t. However, there was a 21% fall in bar and coin demand from 312t to 246t following unprecedented levels of demand last year. ETF outflows stood at 41t compared to 120t in the same period last year.

·         Technology demand was 98t, 5% lower than a year ago as the industry continued its shift towards alternative materials in technological applications.

·         Total supply fell by 7% year on year to 1,048t.  Mine production was up slightly 1% to 812t, but recycling of gold continued to abate, declining 25% year on year to 250t, and on a year to date basis is the lowest level since 2007.

The full report is available here.

Bank of America Merrill Lynch sees Copper to avg $6,939/MT in 2015

Bank of America Merrill Lynch looks for copper prices to average $6,939 a metric ton during 2015 and the red metal demand to expand 4.1% in 2015.

According to BAML, there are signs of global economic growth stabilizing, led by emerging markets, including China. Europe is also steadying, while the U.S. and U.K. have held up.

Considering BAML core view that copper is a trade on global rather than just Chinese growth, we believe the macroeconomic backdrop should be supportive to prices into the first quarter.

In China, an end to destocking in the private sector should push imports above the levels seen during the summer. And, while analysts look for increases in mine supply, BAML does not expect this to be enough to cause a glut.

The biggest percentage increase in concentrates occurred in 2013 and is always long behind us. BAML looks for a supply surplus of 101,000 metric tons this year, declining to just 15,000 tons in 2015.

“Putting it all together, we believe that copper is unlikely to break out of recent ranges, yet we advocate a tactical long position in copper as recent apprehension over the global macro economy and China subsides moving into 2015,” analyst with BAML added.