The tug of war continues for the stock market: stocks got out to a nice start yesterday, weathering the release of Federal Reserve minutes confirming the current pace of rate increases. This show of confidence eroded, however, as US Treasuries ascended to a 4-year high.
The volatile trading pattern continues today, with an early rally under attack from bears at the time of this writing. Increased volatility only stands to benefit news-based traders, however. Use the button below to sign up for a free, live training e-seminar, featuring a tour of our interface and some basic tips for news-based trading.
The current volatility in the market represents a divergence of opinion on the dynamics of the global macroeconomy. Earnings remain strong, bulls insist, and can easily absorb some modest price increases. For the bears, downward pressure from rising interest rates is all but inevitable.
Oil and mining stocks will provide a powerful (and profitable) inflection point for this debate. Growing demand will almost surely place greater pressure on the crude market—the question is whether producers are sitting on enough idle compacity to absorb the demand increase without raising prices. Prices had been appreciating in recent months, only to plummet in parallel with stocks during the recent market correction.
Whatever the outcome, oil, gas, and mining stocks will continue to attract interest as a strategic hedge. Indeed, yesterday’s Top Performer is tightly tied to the copper market. Today, earnings fueled by rising crude prices produced this Top Performer:
Whiting Petroleum Co. focuses on gas and oil production in the Rocky Mountain region of the United States.
This morning, WLL announced results for Q4, 2017, along with financial guidance for 2018. Q4 production was up 12% from the third quarter. They anticipate further production increases in 2018. Costs came in below projections for 2017, although so did their per/barrel earnings differential. Fields in North Dakota have been particularly productive.
Meanwhile, Whiting is implementing structural changes to encourage a tighter focus on the most profitable wells: executive compensation will be tied to a drilling rate of return metric.
Investors were impressed by the announcement overall, driving the stock to gains over 20% at the time of this writing, with its momentum sustaining even as the broader market tips downward.
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