Oil Market's Rally Loses Steam

• GDP


• Unemployment


• Interest Rates


• Inflation


• Business Spending


• Energy


• Housing


• Retail Sales


• Trade Deficit

GDP	2.1% pace in ’17, 2.4% in ’18 More »
Jobs	Hiring pace should slow to 175K/month by end ’17 More »
Interest rates	10-year T-notes at 2.4% by end ’17 More »
Inflation	1.4% in ’17, down from 2.1% in ’16 More »
Business spending	Rising 3%-4% in ’17, after flat ’16 More »
Energy	Crude trading from $40 to $45 per barrel in December More »
Housing	Existing-home sales up 3.5% in ’17 More »
Retail sales	Growing 3.5% in ’17 (excluding gas) More »
Trade deficit	Widening 4% in ’17, after nearly flat ’16 More »

Crude oil prices are treading water after the oil market rallied sharply last month. At about $47.50 per barrel, benchmark West Texas Intermediate is off slightly from a week ago because of lingering oversupply concerns. Despite pledges to cut production, OPEC actually boosted its collective exports. Meanwhile, U.S. oil production continues its slow but steady rise. And now, with the summer driving season wrapping up, oil demand is likely to soften.

We see WTI trading between $40 and $45 per barrel in December, down modestly from its current level. Global stockpiles of oil and refined fuels held in storage remain higher than normal, and global demand just doesn’t look strong enough to soak up the excess supply anytime soon.

Via E-mail: Energy Alerts from Kiplinger

Prices at the pump are largely holding steady. At $2.34 per gallon, the national average price of regular unleaded gasoline is down a penny from a week ago. We look for the average price to remain between $2.30 and $2.40 for the rest of the summer. The price of diesel, now averaging $2.53 per gallon, is also unlikely to move much.

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Natural gas prices are also stuck in a rut. At $2.96 per million British thermal units (MMBtu), the benchmark gas futures contract remains very close to our expected summer trading level of $3. A major heat wave could change that by stoking electricity demand and forcing gas-fired power plants to kick into high gear. But weather forecasts aren’t calling for such a scenario, meaning that gas demand figures to remain modest. That should keep gas futures prices near $3 per MMBtu until fall temperatures goose heating demand.

Source: Department of Energy, Price Statistics

Oil Market's Rally Loses Steam

There are 7 ‘sins’ the retail industry keeps committing and it's killing the stocks

Credit Suisse has released a list of “seven retail sins,” highlighting some problems faced by retailers that the firm’s analysts saw emerge in a slew of earnings reports over the past few weeks.

“Results last week, particularly in the sporting goods space, serve as a reminder of some of the key issues impacting the retail sector,” wrote Credit Suisse analyst Seth Sigman in Monday’s note to clients. “Our view is that retail is not dead, but needs to change, and take the pain.”

Major retail stocks including Dick’s Sporting Goods and Foot Locker plunged last week after reporting feeble sales, pulling down other retailers in their wake. After Foot Locker’s report, shares of Nike fell in response, down more than 5 percent since last Thursday.

As fears of Amazon dominance drag on the retail industry, Credit Suisse analysts will be looking for retailers that can tackle these seven “sins” to better protect themselves against gloomy sales.

Here are the seven “sins” as described by Credit Suisse.

1)“Pricing is too high, in an increasingly more price transparent world. We are seeing more retailers respond by lowering prices (most recently Dick’s), or trying to vertically integrate to support margins (e.g., Michaels).”

2) “Retailers that are over reliant on brands are in trouble, as those brands expand distribution and struggle with their own growth. We believe that was one of the key issues for Hibbett Sports and Dick’s. It’s a big issue for Bed Bath & Beyond as well.”

3) “Retail is over-stored.”

4) “‘Omni-channel’ still needs to be figured out.”

5) “E-commerce investments are disruptive to the model and seem to be never ending. Best Buy has openly discussed the need to continue investing. “

6) “Retailer cost structures are too high. We have recently seen the first round of cost cuts in years, including at Bed Bath & Beyond, Dick’s, Lowe’s, Party City, among others.”

7) “There is little, if any customer loyalty to retailers without their own brands.”

The worst performer in the S&P 500 this year is Foot Locker, down more than 50 percent. Macy’s, L Brands, Advance Auto Parts, Signet Jewelers and Under Armour are also among the 10 worst performers this year in the benchmark, making the list dominated by retail.

One retailer bucking the trend this year is Best Buy, whose shares are up 40 percent so far in 2017.

Best Buy “cut its prices, improved its online offering, enhanced the store experience and partnered with vendors, all of which supported a reacceleration in market share, and then margin improvement,” writes Credit Suisse in the note about the electronic seller’s resurgence.

There are 7 ‘sins’ the retail industry keeps committing and it's killing the stocks

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