Business

Bear Run Sends Oil Down For 10th Straight Session

Published

5 years ago

February 4, 2020

A bear stampede has taken hold of oil markets as the coronavirus plague continues to spread FUD (fear, uncertainty and doubt) amongst the investing universe. Oil futures slid for a 10th straight session Monday as casualties hit 426 and the number of infections surpassed 20,000.

And now big money managers have joined the stampede as new data reveals the virus is creating severe demand shocks that could further depress prices. Reuters has reported that fund managers and hedge funds were heavy sellers of crude oil and various refined products last week as the worsening outbreak heightened fears of a demand meltdown in China, the world’s leading importer of crude.

Brent crude prices have dropped 21% over the past 30 days, less than two months after the first coronavirus case was reported in the Chinese city of Wuhan. Nearly 60 million people in the country remain under lockdown in the cities as international researchers frantically race to develop a vaccine that will halt the spread of the virus.

Brent Crude Price 1-Month Change

Source: Bloomberg

Bear Stampede

According to the Commitments of Traders (COT) report by the CFTC, hedge funds and other money managers sold petroleum futures and options in the six most important contracts equivalent to 147 million barrels in the week ending Jan. 28. Contracts that were out of favor include Brent (27 million), NYMEX and ICE WTI (56 million barrels), U.S. gasoline (28 million), U.S. diesel (16 million) and European gasoil (20 million).

This marked the largest sale by funds in any one week since July 2018 and among the heaviest sales over the past eight years.

That’s quite alarming considering that fund managers have largely remained bullish even in the midst of the ongoing bear stampede. To be fair, fund selling in oil has been going on since Jan. 7; however, it was initially in only small volumes, mostly reflecting profit-taking after a large accumulation of bullish positions over much of last year. But the wave of selling has now accelerated with funds having sold a total of 236 million barrels of crude and products over the last three weeks compared to purchases of 533 million barrels over the previous three months. Related: Citi: Brent Oil Could Fall To $47 As Demand In China Crashes

Following the latest wave of selling, hedge fund positioning in crude and products has fallen to 4:1 with bullish long positions outnumbering bearish short ones. That’s below the long-term average of 5:1 and a sharp turnaround of a 7:1 long-short ratio at the start of the year.

Demand Shocks

Oil traders appear justified in their anticipation for oil consumption to take a massive hit in the short term.

Last week, Bloomberg reported that Chinese oil demand had dropped by about 3 million barrels a day, or ~20% of total consumption. The drop marks the largest demand shock in the market since the global financial crisis that ended in 2009. It’s also the most sudden shock the market has suffered since the Sept. 11 attacks nearly two decades ago.

It remains to be seen what measures OPEC and its allies will take to ameliorate the situation when they meet on Tuesday and Wednesday. Helima Croft, global head of commodity strategy at RBC Capital Markets, has told CNBC that the cartel could lower production by another million barrels per day or risk further collapse in prices. It’s going to be a tough call though for the members to agree to such a heavy cut considering that the group had already agreed to deeper production cuts in December.

Selloff Overdone

Investors typically hate uncertainty, and this is the key reason why the coronavirus has been wreaking so much havoc on financial markets. China’s lunar new year has already been extended with many businesses and factories remaining shut with little clarity regarding when the situation will be contained. Meanwhile, several prominent airlines have suspended flights to China while the US, Australia, Japan, Italy, Russia, Pakistan and Singapore have issued a travel ban that prevents travelers that have been to China in recent weeks entry into their respective countries.

While it’s almost inevitable that oil demand will suffer in the short-term, not everybody believes that the sky is falling or that the heavy oil selloff is merited.

Vandana Hari, founder and CEO of energy markets consultancy Vanda Insights, says it’s unfair to compare the coronavirus epidemic to the SARS outbreak of 2003 because the last one was compounded by the US invading Iran. Vandana notes that the fear premium peaked before the invasion, with oil prices falling from $30/barrel to $20/barrel before recovering rapidly after OPEC quickly stepped in and filled the gap left by Iran.

Vandana sees OPEC stepping in to defend Brent at the $60/barrel psychological floor though she says it’s a bit premature for the organization to do so at this time.

S&P Platts is also a bit more bullish about the situation and sees the effects of the coronavirus cooling off around June-July.

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Business

What Difference Will You Make to an Employer?

Published

11 hours ago

October 21, 2024

Nick Kossovan

It’s common knowledge that companies don’t hire the most qualified candidates. Employers hire the person they believe will deliver the best value in exchange for their payroll cost.

Since most job seekers know the above, I’m surprised that so few mention their Employee Value Proposition (EVP). Most job seekers list their education, skills, and experience without substantiating them and expect employers to determine whether they can benefit their company; hence, most resumes and LinkedIn profiles are just a list of opinions—borderline platitudes—that are meaningless and, therefore, have no value. Job seekers need to better explain, along with providing evidence, how they’ll contribute to an employer’s success.

Employers don’t hire opinions (read: talk is cheap); they hire results.

You’re not offering anything tangible when you claim:

I’m a great communicator.
I’m detail oriented.
I’m a team player.

Tangible:

“At Global Dynamics, I held quarterly town hall meetings with my 22 sales reps, highlighting our accomplishments, identifying opportunity areas, and recognizing outstanding performers.”
“For eight years, I managed Vandelay Industries IT department, overseeing a staff of 18 and a 12-million-dollar budget while coordinating cross-specialty projects. My strong attention to detail is why I never exceeded budget.”
“While working at Cyberdyne Systems, I was part of the customer service team, consisting of nine of us, striving to improve our response time. Through collaboration and sharing of best practices, we reduced our average response time from 48 to 12 business hours, resulting in a 35% improvement in customer feedback ratings.”

These examples of tangible answers provide employers with what they most want to hear from candidates but rarely do; what value the candidate will bring to the company. Typically, job seekers present their skills, experience, and unsubstantiated opinions and expect recruiters and employers to figure out their value, which is a lazy practice.

Getting hired isn’t based on “I have an MBA in Marketing and Sales,” “I’ve been a web designer for over 15 years,” “I’m young, beautiful and energetic,” blah, blah, blah. Likewise, being rejected isn’t based on “I’m overqualified,” “I’m too old,” “I don’t have enough education,” blah, blah, blah. Getting hired depends entirely on showing employers that you can add value and substance to their company; that you’ll serve a purpose.

When you articulate a solid value offer, the “blah, blah, blah” doesn’t matter. Job seekers focus too much on the “blah, blah, blah,” and when not hired, they say, “It’s not me, it’s…” The biggest mistake I see job seekers make is focusing on the “blah, blah, blah”—their experience and education—believing this is what interests employers. Hiring managers are more interested in whether you can solve the problems the position exists to solve than in your education and experience.

Not impressive: Education

Impressive: A track record of achieving tangible results.

You aren’t who you say you are; you are what you do.

If you want to be somebody who works hard, you have to actually work hard. If you want to be somebody who goes to the gym, you actually have to go to the gym. If you want to be a good friend, spouse, or colleague, you have to actually be a good friend, spouse, or colleague. Actions build reputations, not words.

The biggest challenge job seekers face today is differentiating themselves. To stand out and be memorable, don’t be like most job seekers, someone who’s all talk and no action. Any recruiter or hiring manager will tell you that the job market is heavily populated with job seekers who talk themselves up, talk a “good game” about everything they can “supposedly” do, drop names, etc., but have nothing to show for it.

More than ever, employers want to hear candidates offer a value proposition summarizing what value they bring. If you’re looking for a low-hanging fruit method to differentiate yourself, do what job seekers hardly ever do and make a hard-to-ignore value proposition.

Increase sales: “Based on my experience managing Regina and Saskatoon for PharmaKorp, I’m confident that I can increase BioGen’s sales by no less than 25% in Winnipeg and the surrounding area by the end of 2025.”
Reduce cost: “During my 12 years as Taco Town’s head of purchasing, I renegotiated contracts with key suppliers, resulting in 15% cost savings, saving the company over $450,000 annually. I know I can do the same for The Pasta House.”
Increase customer satisfaction:“During my time at Globex Corporation, I established a systematic feedback mechanism that enabled customers to share their experiences. This led to targeted improvements, increasing our Net Promoter Score by 15 points. I can increase Dunder Mifflin’s net promoter score.”
Save time: “As Zap Delivery’s dispatcher, I implemented advanced routing software that analyzed traffic patterns, reducing average delivery times by 20%. My implementation of this software at Froggy’s Delivery can reduce your delivery times by at least 20%, if not more.”

If you want to achieve job search success as soon as possible, structure your job search with a single thread that’s evident and consistent throughout your résumé, LinkedIn profile, cover letters and especially during interviews; clearly convey what difference you’ll make to the employer.

_____________________________________________________________________

Nick Kossovan, a well-seasoned veteran of the corporate landscape, offers “unsweetened” job search advice. You can send Nick your questions to artoffindingwork@gmail.com.

Business

Netflix’s subscriber growth slows as gains from password-sharing crackdown subside

Published

4 days ago

October 17, 2024

Anne Joseph

Netflix on Thursday reported that its subscriber growth slowed dramatically during the summer, a sign the huge gains from the video-streaming service’s crackdown on freeloading viewers is tapering off.

The 5.1 million subscribers that Netflix added during the July-September period represented a 42% decline from the total gained during the same time last year. Even so, the company’s revenue and profit rose at a faster pace than analysts had projected, according to FactSet Research.

Netflix ended September with 282.7 million worldwide subscribers — far more than any other streaming service.

The Los Gatos, California, company earned $2.36 billion, or $5.40 per share, a 41% increase from the same time last year. Revenue climbed 15% from a year ago to $9.82 billion. Netflix management predicted the company’s revenue will rise at the same 15% year-over-year pace during the October-December period, slightly than better than analysts have been expecting.

The strong financial performance in the past quarter coupled with the upbeat forecast eclipsed any worries about slowing subscriber growth. Netflix’s stock price surged nearly 4% in extended trading after the numbers came out, building upon a more than 40% increase in the company’s shares so far this year.

The past quarter’s subscriber gains were the lowest posted in any three-month period since the beginning of last year. That drop-off indicates Netflix is shifting to a new phase after reaping the benefits from a ban on the once-rampant practice of sharing account passwords that enabled an estimated 100 million people watch its popular service without paying for it.

The crackdown, triggered by a rare loss of subscribers coming out of the pandemic in 2022, helped Netflix add 57 million subscribers from June 2022 through this June — an average of more than 7 million per quarter, while many of its industry rivals have been struggling as households curbed their discretionary spending.

Netflix’s gains also were propelled by a low-priced version of its service that included commercials for the first time in its history. The company still is only getting a small fraction of its revenue from the 2-year-old advertising push, but Netflix is intensifying its focus on that segment of its business to help boost its profits.

In a letter to shareholder, Netflix reiterated previous cautionary notes about its expansion into advertising, though the low-priced option including commercials has become its fastest growing segment.

“We have much more work to do improving our offering for advertisers, which will be a priority over the next few years,” Netflix management wrote in the letter.

As part of its evolution, Netflix has been increasingly supplementing its lineup of scripted TV series and movies with live programming, such as a Labor Day spectacle featuring renowned glutton Joey Chestnut setting a world record for gorging on hot dogs in a showdown with his longtime nemesis Takeru Kobayashi.

Netflix will be trying to attract more viewer during the current quarter with a Nov. 15 fight pitting former heavyweight champion Mike Tyson against Jake Paul, a YouTube sensation turned boxer, and two National Football League games on Christmas Day.

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Business

All Magic Spells (TM) : Top Converting Magic Spell eCommerce Store

Published

4 days ago

October 17, 2024

Sven Eggers

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