Sun, 28th May 2017

Anirudh Sethi Report


Archives of “chesapeake energy” Tag

Overnight US Market :Dow closed -19 points.

Energy companies led U.S. stock indexes lower Monday as the price of crude oil declined. Phone company and materials stocks were also among the big decliners. Investors were weighing the latest batch of company earnings news.

The Dow Jones industrial average fell 19.04 points, or 0.1%, to 20,052. The Standard & Poor’s 500 index fell 4.86 points, or 0.2%, to 2293, as the broad-based index snapped a three-day winning streak. The Nasdaq composite index fell 3.21, or 0.1%, to 5664, as the tech-heavy index pulled back from Friday’s record closing high.

Benchmark U.S. crude fell 82 cents, or 1.5%, to close at $53.01 a barrel in New York. Brent crude, used to price international oils, lost $1.09, or 1.9%, to $55.72 a barrel in London.

Several energy companies were trading lower. Devon Energy slid 3.2%, while Chesapeake Energy dropped 3%. Marathon Oil shed 4.1%.

The 10-year Treasury yield fell to 2.42% from 2.47% late Friday.

Investors are still cautious as Trump’s early acts as president have been shaping markets for the past couple of weeks. On Friday, Trump directed the Treasury Secretary to look for potential changes to the Dodd-Frank law, which reshaped financial regulations after the 2008-09 financial crisis. Investors applauded that move but remain uncertain about the future impact of other policies. Over the weekend, the U.S. immigration ban on refugees and travelers from seven Muslim-majority countries was blocked by a federal judge and an appeals court turned down a Justice Department request to set that judgment aside. The White House said it expects the courts to restore executive order, which was founded on a claim of national security.

Goldman Sachs, Morgan Stanley, & Citi all warning of lower commodity prices

Yep, they are saying prices are likely to stay low for years to come.

Between the three, they’re saying:

  • Crude oil and copper are unlikely to rebound because of excess supplies (GS)
  • Weaker currencies in producing countries will encourage robust output of raw materials sold for dollars, even during bear markets (MS)
  • Sluggish world economy makes it “hard to argue” that most prices have already bottomed (Citi)


  • Bloomberg Commodity Index on Sept. 30 capped its worst quarterly loss since the depths of the recession in 2008
  • China, the biggest consumer of grains, energy and metals, is expanding at the slowest pace in two decades
  • Alcoa plans to split itself in two
  • Chesapeake Energy Corp. cut its workforce by 15 percent
  • Caterpillar may shed 10,000 jobs

More doom and gloom at Bloomberg.

Chesapeake foresees higher gas prices

Chesapeake Energy is locking in prices for next year’s gas sales at “well above” today’s levels, the US shale gas and oil producer said, in the latest sign of how the market is beginning to tighten.

Steve Dixon, Chesapeake’s acting chief executive, told analysts on Monday that the company had “taken advantage of the recent surge in natural gas prices” to lock in prices for more of its planned sales in 2013. It had also begun hedging for 2014 at prices “well above $4” per million British thermal units, “a level the market has not seen for quite some time”, he said.

However, he said Chesapeake would not be taking advantage of the higher prices to step up its gas production, and would instead continue to focus on developing its more profitable oil reserves.

Benchmark US natural gas last week closed above $4 per mBTU for the first time in a year and a half, having doubled over the past 12 months, thanks to cold weather and production that has been roughly flat for more than a year. Read More 

Jim Chanos Is Finding Short Opportunities All Over The Place

Sept. 19 (Bloomberg) — Jim Chanos, who oversees about $6 billion as the founder and president at Kynikos Associates Ltd., is finding companies to bet against as the U.S. stock market heads for the biggest rally in three years.

The 54-year-old money manager who rose to fame shorting Enron Corp. before its collapse predicts declines in companies that may be inexpensive compared with earnings. Even as the U.S. economy recovers and profits approach record highs, Chanos is finding so-called value traps in natural gas companies, iron-ore producers, Hewlett-Packard Co. and Coinstar Inc.

“A number of high-profile natural gas companies may end up in financial difficulty as early as next year,” he said, declining to give any company names. For Hewlett Packard, “It’s very difficult in the technology space when you have been leapfrogged to prosper again,” he said during a Sept. 11 interview at Bloomberg headquarters in New York.

With the Standard & Poor’s 500 Index trading 11 percent below its average valuation since the 1950s, Chanos is trying to identify companies that are likely to fall even as the economy improves. He declined to provide performance data for his funds. The S&P 500 has rallied 16 percent in 2012 and is poised for the biggest annual gain since 2009. Read More