At the end of 2016 we wrote about a new era for oil and a new pricing pattern that we thought would hold into 2017. Is the snake still stuck in the drain? How well is our price prediction holding up and what does it mean for M&A and the much beleaguered oil field services sector in 2017?
Profit warnings are a measure of performance against expectation. So, given the overall upside surprise in 2016, it’s not surprising that the annual figure was the lowest for three years. But our data also tells a story of a growing gap between winners and losers. What’s creating such a great divergence, will it last and what does it mean for corporate prospects and forecasting in 2017?
We said it wouldn’t be a quiet year! This week we’re focusing on two phenomena: what looks set to be a record January for global M&A – surpassing even 2007 – and record equity market performances in the wake of the Dow going through 20K. The dollar looks “interesting” too. As do high-yield bonds – even energy ones. So much for uncertainty damping activity. I keep hearing about “animal spirits” driving this – but is it sustainable?
Making predictions is always daunting – this year more than most. Nevertheless, we’re going to look beyond current uncertainties to identify trends that will influence the Capital Agenda in 2017. One easy prediction: it won’t be quiet. Beyond that, almost anything seems possible. Last year’s overturning of decades of consensus was truly extraordinary; but, we only saw glimpses of what might replace it. This is where 2017 gets interesting.
How do we even start to sum up 2016 on in one blog? Great tomes will surely be written about a year in which so many orthodoxies were overturned and paradigms shifted. But we’re going to give it our best shot by picking what we think are five standout moments– i.e. those we think best epitomise a tumultuous year in capital markets. Or not all that tumultuous, considering….
The OPEC deal announced last week helped to propel the price of a barrel of Brent Crude over the $50 mark, the highest for well over a year and almost double its January low. But prices have stalled since, underlining our view that this isn’t a one way ticket. So where next for oil?
I don’t know about you, but I’m finding it increasingly hard to predict where markets will go next. I understand the logic behind the recent rise in equities – but not the certainty with which it’s being applied. We don’t know for sure what BREXIT or a Trump presidency means. So, I wondered…does this rally really signal confidence? Time to look under the hood…