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Chart of the Day: ExxonMobil Aims for $95

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ExxonMobil (NYSE:), a significant component in the United States Oil Fund (NYSE:), announced on Dec. 8 that it would expand its share buyback program to $50bn over the next three years.

The decision comes as the U.S. oil and gas industry experiences an increase in profits due to rising energy prices, despite criticism on Oct. 28 from President Joe Biden that profits should not be used for dividends or stock buybacks while “a war is raging.” This presidential attack follows Biden’s chiding the industry since June for profits amid high .

Despite this backlash, ExxonMobil’s focus on returning profits to shareholders through its share buyback program has contributed to the company’s strong performance in the market this year, with shares up over 77% even as the has declined.

In addition to the share buyback program, ExxonMobil will also increase its spending on energy projects and low-carbon initiatives, including carbon capture and storage, biofuels, and hydrogen, in the coming years.

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However, the USO fund, which holds ExxonMobil, has been volatile and may not be a suitable option for retail investors looking for consistent returns with lower risk. Energy stocks or broad-based sector ETFs may be better options.

Global have recently fallen more than 20% due to a deteriorating outlook for oil consumption. This decline is consistent with a cyclical downturn in the oil market and the potential onset of a business cycle slowdown or recession.

High oil prices and a slowing economy have caused a reduction in consumption. Initially, the impact of this decline was masked by concerns about a planned price cap on Russia’s crude and refined product exports.

Still, as it became clear that the cap would be introduced at a relatively high level with a relaxed approach to enforcement, the underlying deterioration in consumption was revealed, leading to a sharp drop in prices.

Additionally, hedge funds and other money managers have significantly reduced their positions in petroleum futures and options contracts, particularly in , further contributing to the price decline.

The current situation bears some similarities to the oil market downturn in 2014. Still, the recent downturn is occurring in the context of a global recession, and the factors driving it are more complex and diverse.

On Oct. 6, I a bullish call on XOM. Having actualized its target, I’m now giving risk parameters for a bearish call.

XOM Daily Chart

 

It’s noteworthy that ExxonMobil failed to maintain gains after the Dec. 8 announcement, even as the broader market gained. Oil dropped that day, despite China’s easing its zero-COVID policy. The market narrative argued that traders were losing faith in the commodity.

The price has been developing a rising flag after topping. The flag’s top is a return move confirming the top’s neckline. On Friday, the flag top/top’s neckline resisted the price for the third time.

The top’s height implies a $7 move from the $107 breakout point, implying a $100 target, suggesting the flag’s completion with a downside breakout.

The flagpole – the drop before the range – is what technicians use as a target, as the same interested parties are expected to repeat the downside move upon breakout, implying a $9 plunge from the breakout point to somewhere around $95.

Note how the current resistance is 50 DMA, and the implied target is 200 DMA, with the 100 DMA supporting the flag.

Trading Strategies

Conservative traders should wait for the price to fall below the 100 DMA, then retest the flag’s resistance.

Moderate traders would sell upon a rally off the 100 DMA.

Aggressive traders could sell now, provided they accept the higher risk proportionate with the higher reward of moving before the rest of the market as it awaits confirmation.

Trade Sample – Aggressive Short

  • Entry: $110
  • Stop-Loss: $115
  • Risk: $5
  • Target: $95
  • Reward: $15
  • Risk-Reward Ratio: 1:3

Disclosure: The author does not own any of the securities mentioned in this article.

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OMERS names capital markets head as next chief investment officer – The Globe and Mail

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Ontario Municipal Employees Retirement System (OMERS) has named capital markets head Ralph Berg as its next chief investment officer, succeeding Satish Rai.

Mr. Berg starts as CIO on April 1 after two years as global head of OMERS Capital Markets, where he oversaw the public-market investments that make up more than half of investment assets at the pension plan.

In April, Mr. Rai will move to an advisory role and plans to retire from OMERS late in 2024. He has been CIO since 2018 and also led OMERS’ capital markets arm during his eight years at the pension plan, while helping guide its expansion into Asian markets. He was previously CIO at TD Asset Management, a division of Toronto-Dominion Bank.

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Mr. Berg has been at OMERS since 2013. He joined the pension plan as global head of its infrastructure arm after a career in banking at Credit Suisse Group AG and Deutsche Bank AG.

“Ralph is a proven investor and a seasoned executive,” said OMERS chief executive officer Blake Hutcheson, in a news release.

Mr. Berg’s successor as head of capital markets has yet to be announced.

OMERS had $119.5-billion of assets as of June 30 last year. Over Mr. Rai’s tenure as CIO, it has shifted more of its assets from public to private markets, which helped OMERS post steady results in the first half of last year, losing only 0.4 per cent despite difficult market conditions.

That came after two volatile years in the COVID-19 pandemic that included an 11.4-per-cent loss in 2020 – when OMERS marked down real estate and private equity holdings that were affected by strict public health measures – and a rebound in 2021 that saw the plan’s assets gain 15.7-per-cent.

As Mr. Rai prepares to step down, Mr. Hutcheson said: “I look forward to his continued commitment and counsel” in his advisory role.

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Ark Invest Cathie Wood: artificial intelligence chatGPT – CNBC

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Forget ChatGPT — an AI-driven investment fund powered by IBM's Watson supercomputer is quietly beating the market by nearly 100% – Yahoo Canada Finance

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The Watson-powered ETF is beating a total market fund by nearly 100%.PhonlamaiPhoto/Getty Images

  • While the language bot ChatGPT has gone viral, a Watson-powered ETF is making nearly double the returns of the broader market.

  • The AI Powered Equity ETF is up 10.4% in 2023, whereas the Vanguard Total Stock Market Index is up 5.67%.

  • IBM’s Watson supercomputer helps balance the fund’s portfolio holdings.

The popular language bot ChatGPT has shown a humanlike ability to render articles, emails, and even dating-app messages. But if you ask it to generate a portfolio that can beat the market, it spits out boilerplate information and reminds you it doesn’t have access to live stock data.

Yet, the $102 million AI Powered Equity ETF (AIEQ), which launched in 2017, has been quietly fulfilling that request so far this year. Issued by ETF Managers Group in partnership with the fintech firm Equbot, the fund leans on IBM’s Watson supercomputer to balance its portfolio.

That 114-holding portfolio is up 10.4% so far in 2023, while the Vanguard Total Stock Market ETF is up 5% over the same stretch.

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Still, as ETF.com highlighted, the former is actively managed, and thus more expensive than the benchmark fund, cutting into actual returns to investors. The AI-powered ETF charges 0.75%, whereas Vanguard’s costs 0.03%. Both funds include JPMorgan and UnitedHealth Group in their top-10 holdings.

Chris Natividad, the chief investment officer of Equbot, said the Watson-powered fund can look beyond standard market data and cull information from tweets and earnings calls, according to ETF.com.

“We’re focused on investment related data, looking at how these different types of signals impact security practices across different time horizons,” Natividad said, per ETF.com.

“The best days of the fund are still ahead of it,” he added. “And just as you’ll see ChatGPT’s responses change and evolve with time and data, so will our fund.”

Meanwhile, ChatGPT’s parent company, OpenAI, this month secured a $10 billion investment from Microsoft this month, and the technology continues to make waves across sectors.

Online media outlet BuzzFeed announced last week it plans to leverage the technology to create content, educators are warning about the bot’s repercussions in schools, and chipmakers are poised to cash in.

Read the original article on Business Insider

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