DoctoRx's  Instablog

Not for the first time recently, we are seeing stocks, bonds and gold/metals all decline in price. Is the fact of the FOMC statement and Bernanke interview more of a faux rather than real reason for this selloff?

Is liquidity running short? Are interest rates already "too high"?

More later...

Helmerich & Payne (HP), a high-quality oil and gas driller, has announced that its quarterly dividend has risen from 15 cents to 50 cents. This appears not to be a special dividend. The stock is up a bit to $63.75.

I recently wrote a SA article raising the question of whether a share buyback is in the offing. It may well be, as well.

I continue to look at HP as a stock for patient energy investors to hold for the long run, though it's always prone to sell-offs after run-ups. Thus it's been a pretty good trading stock, as well.

Disclosure: I am long HP.

Additional disclosure: Not investment advice

When major currencies move, short-term trading can distort things. On its face, no matter what US Treasuries or German bunds are doing as Japanese and others may be selling them, the massive and ongoing decline in the value of the yen is a potent disinflationary force. Japan has seen a massive increase in the price of oil, copper and even the cost of US Treasuries. Thus it is a less effective competitor for these assets. The US is receiving an anti-recessionary, anti-inflationary cut in costs from actions relating to the yen. This is reminiscent of the 1997-8 "Asian contagion", which was associated by summer/fall 1998 with multi-year lows in T-bond yields.

It looks as though the fear of QEternity ending plus perhaps some Japanese selling of US Treasuries is normalizing interest rates very recently. But the actual fundos of US inflation are benefitted by the recognition that Japan's economy is now very weak and thus its currency needed to be revalued down to reflect that weakness.

Thus this strikes me as good for Treasuries but neutral for US stocks, as Japan can now afford to import fewer US goods and becomes a stronger exporter to the US, thus displacing more domestic US production.

Disclosure: I am long DXJ, TLT, EDV.