A new way to see America. What better way to go out and see America than in your new, sleek Obama- mobile? Your friend's will all marvel at that expensive hybrid technology that will soon come to symbolize the fuel efficient future at Obama Motor's Auto-nation. No this is not your daddy's Obama-mobile nor is it GM but in reality, this is now Obama-motors.
Obama is, for all practical purposes, running GM and Chrysler and its fortunes. And from this point forward success or failure will rest squarely upon the shoulders of this American President. Or should I say President and CEO of Obama-motors. Who knew that the President wanted to be in charge of an auto company?
Of course the stock market did not seem to like the president's new found affection for autos and the stock market got crushed on the Presidents dabbling in this new frontier. Auto and bank stocks got rocked on the feeling that the government has no business trying to run auto companies many wondering what's next? Will Obama now decide what cars that the companies are going to produce and the American people will buy? Are the cars now going to be standard government issue? Is the President going to decide what kind of cars the companies produce? Can you get one in any color as long as it is a hybrid? Or are they only going to be offered in democrat blue?
It was obvious that the negative stock market action seemed to weigh on the energy complex yet what seemed to weigh more was the sudden attraction to the pre-G20 dollar. The dollar soared on news that Ireland's long term debt rating was lowered by Standard and Poor's. Jean Claude Trichet responded by saying that the ECB stood ready to do what it takes to stabilize the situation. Trichet warned that the Euro-zone economy has weakened since January. He said that there is a high degree of uncertainty but the central bank will do what is needed to cope with the financial crisis. That means of course that the stodgy Trichet might be ready to unleash a wave of stimulus of his own, something some of his other European counterparts are not that excited about in what may be the most exciting and explosive G20 meeting ever! And I am not just talking about the protesters in the street but the possible protests within the G20.
Obama may think he has all the answers but his policy of print and spend is not going over too well with other members of the G20, especially Germany and France. The London Times reports that President Sarkozy of France has threatened to wreck the summit unless France's demands for tougher financial regulation are not met. The Times says that France will not accept a G20 that produces a false success with language that sounds good but contains no commitments. It is possible that Sarkozy may walk out. French President Nicolas Sarkozy has insisted radical reform of capitalism is more important than tax-cutting.
That follows comments from the Chancellor of Germany Angela Merkel declaration over the weekend that, I will not let anyone tell me we must spend more money. In fact things are getting so contentious that The Australian reported that a draft of the final communiqué of Thursday's G20 summit that calls for $2.88 trillion dollars of fiscal stimulus has fiscal stimulus has been leaked to the German press, in an apparent act of sabotage by European leaders against summit host Gordon Brown. London's Sunday Telegraph said there were suspicions the leak was a deliberate act of sabotage by sources within the German government, where Chancellor Angela Merkel is adopting a more cautious approach to fiscal moves to boost the world economy than the British Prime Minister, who will chair the summit.
All of this pre-G20 drama and backstabbing sent global traders scurrying to the safety of the dollar and to the to the safety of treasury bonds. Of course that means that oil priced in dollars got hammered as well some of the other dollar priced commodities like gold silver and copper.
Spring officially begins today!!! Ok, maybe not technically according to the calendar but if you're a grain trader today is the day!! The much anticipated planting intentions report is coming out today!! And with the Obama administration looking to add a lot more ethanol to our gas tanks soon, the corn number could have a major impact on what we end up paying for gasoline in the future! And if you want to know what we are paying right now, according to the EIA retail gas prices jumped 8.4 cents a gallon, the largest jump since last November.
The G20 impact on the dollar and the stock market will be the main driver for oil. Economic uncertainty and big supply are the two competing factors. Bottom line the market in energy is getting set up for another big trade! Get ready!
Buy May crude at 4530 - stop 3900.
Buy May heating oil at 12300 - stop 11400.
Buy May RBOB at 12500 - stop 12300.
Buy may natural gas at 320 - stop 290.
The Dan Flynn Corn & Ethanol Report
The Grain Reports that will start the direction of the Grain Complex looms ! In the overnight the May Corn settled at 388 1/4 up 2 cents.The range was 389 to 385 3/4.
The Energies spiked higher after a significant selloff yesterday. Watch the U.S. Dollar and Stock Market.