Oil is having its best quarter since the financial crisis

• Will Martin
 

• 5h
• 468

Oil is coming back! REUTERS/Shamil Zhumatov

You might not have noticed with all the Brexit chaos but the price of oil has been on a charge in recent months.

So great has oil's bounce been that it is set to see the biggest quarterly gain since 2009 when the world was coming to terms with the impacts of the global financial crisis.

Oil has been on a charge ever since hitting a 14-year low in January when the price of a barrel of West Texas Intermediate crude fell below $27. It has gained around 88% since that point.

Since the beginning of the second quarter of the year, futures contracts on the world's most important commodity have risen by 29% in New York trading, according to data from Bloomberg. If there is not a massive downward spike over the next day, that rise would mark the best quarter since 2009.

Here is the chart showing oil's recent rally (note the incredibly low price compared to 2014 highs):Investing.com

In the past quarter, the oil industry has experienced some of the most significant events in recent years, including a huge meeting between oil producers in Qatar. The meeting was one of the most anticipated events in the oil industry for decades, with traders hoping for the supply of oil to be curbed, but the meeting ended in a damp squib.

The day after the Doha meeting, Brent crude — the international benchmark — dropped as much as 7% just after markets opened, but ended the day up by 0.3% as investors got used to an oil market that was unchanged.

However, regardless of the failure of talks in Doha, oil has managed to surge thanks to a growing rebalancing in the supply and demand problems that had helped drive depressed oil prices. In mid-May, Goldman Sachs, one of the most bearish banks when it comes to oil, suddenly turned bullish, saying the market is now rebalancing, and pointing to huge supply disruptions as the crucial reason for doing so.

A series of huge, unconnected disruptions to production across the world in the past few months hs helped address this issue. During that time the Iraqi government decided to stop pumping oil to Turkey, Kuwaiti workers brought the country's oil industry to its knees with a strike, and a massive wildfire in Canada crippled the country's oil sands. The number of outages is almost too many to count.Goldman Sachs

While oil has enjoyed an insanely strong quarter, it is unlikely that Q3 will be as positive for the industry. Since pushing through the $50 per barrel mark in late May, oil has struggled to break above that level.

Despite oil's recent climb, it seems likely that $50 oil may prove to be something of a ceiling for crude in the coming months, with a large number of the market's most respected oil analysts, including Goldman, backing oil to end the year at around the $50 mark. That could cause big issues for smaller oil-producing nations, which need higher prices to make their production profitable.

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Wall Street is buying itself

• Bob Bryan
 

• 16h
• 3,411
 
• 3
 

Buying frenzy. Reuters/Luke MacGregor

With the Federal Reserve's big test out of the way Wall Street is going on a huge buying binge.

That is, it is buying itself.

The Dodd-Frank stress tests, which measure whether financial institutions with more than $50 billion in US-based assets could survive a severe recession without infecting the rest of the economy, mandate that if a bank fails the firm is not allowed to return cash to shareholders in the form of dividend and buybacks.

Now that the tests are over, the banks that passed are rolling out their buyback plans for the year, and they're huge.

This year only Deutsche Bank and Santander failed the tests, while Morgan Stanley received conditional approval. For the rest of the firms, the cloud has been lifted and the buyback spree can begin.

Here's a run-down of the banks that have announced that they're buying their own shares. The buyback period is over the next 12 months unless otherwise noted:

• JPMorgan: $10.6 billion
• Citi: $8.6 billion
• Bank of America: $5 billion
• Goldman Sachs: Will buy back stock, but did not release the amount.
• State Street: $1.4 billion
• Ally Financial: $700 million
• American Express: $3.3 billion
• BB&T: $640 million
• Capital One: $2.5 billion
• Discover Financial: $1.95 billion
• PNC Bank: $2.0 billion
• SunTrust: $960 million
• Northern Trust: $275 million
• Regions Financial: $640 million
• KeyBank: $350 million

SEE ALSO: The Fed just handed an embarrassing smackdown to 2 European banks

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The Fed just handed an embarrassing smackdown to 2 European banks

• Bob Bryan
 

• 17h
• 8,119
 
• 2
 

Deutsche Bank offices in London. REUTERS/Luke MacGregor

The Federal Reserve has failed Deutsche Bank Trust Corp. and Santander Holdings under themandated Dodd-Frank stress tests.

Morgan Stanley received a conditional non-objection and must resubmit its plan. The bank has until December 29 to do so.

The test measures the ability to respond to an event similar to the financial crisis, and examines 33 financial institutions with more than $50 billion in assets in the US.

Both European-based banks passed the quantitative section of the test, meaning that under the high-stress scenario, they would theoretically have enough capital to survive.

The problem came in the qualitative review of the banks' processes.

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The Federal Reserve said in a release:

"The Federal Reserve objected to the capital plans of Deutsche Bank Trust Corporation and Santander Holdings USA, Inc. because of broad and substantial weaknesses across their capital planning processes, and insufficient progress these firms have made toward correcting those weaknesses and meeting supervisory expectations."

The Fed said that while there were improvements in certain aspects of capital planning at Deutsche Bank Trust Corp., the firm has "material unresolved supervisory issues."

Here's the excerpt on Deutsche Bank:

"The Federal Reserve determined that the assumptions and analysis underlying the capital plan of DBTC, and the capital adequacy process of DBTC, are not reasonable or appropriate. In particular, the Federal Reserve identified deficiencies in the risk management and control infrastructure at DBTC, including risk measurement processes; stress testing processes; and data infrastructure."

DBTC is made up of the US transaction bank and US wealth-management business at Deutsche Bank.

"The capital adequacy of Deutsche Bank Trust Corporation has never been in doubt," said Bill Woodley, CEO of DB USA Corp. and deputy CEO of Deutsche Bank Americas, in a release following the stress-test results.

Here's what the Fed had to say about Santander:

"The assumptions and analysis underlying the capital plan, and the capital adequacy process, are not reasonable or appropriate. The Federal Reserve's review of the capital planning processes at Santander revealed ongoing deficiencies in the risk management framework, including important features of the risk measurement and monitoring function; stress testing processes; and internal controls, governance, and oversight functions."

This is the second year in a row that the American holding side of Deutsche Bank and Santander have failed the test.

Each year the Fed changes the scenario in which the banks have to prove their adequacy. This year, the test included negative interest rates and unemployment near 10%.

SEE ALSO: Congrats, America! The 33 biggest banks in the US are getting safer

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Britain is not going to kiss the EU goodbye until at least 2019

• Lianna Brinded
 

• Jun. 29, 2016, 3:13 AM
• 839

Britain is not going to leave the European Union until at least 2019, according to investment bank Citi.

In a new note, entitled "Any Exit from Brexit? What’s Next for the UK and Europe" by Tina Fordham and Tiia Lehto at Citi, article 50 — the mechanism under the Lisbon Treaty in which a country tells the European Union it is leaving the bloc and thereby gives a two-year notice period — is unlikely to be triggered anytime soon because several things need to happen first.

These are outlined in the following chart:

Citi

As you can tell, Citi predicts that the ruling Conservative party need to find a new leader, who will also be the new Prime Minister. That will be followed by a flurry of political party conferences. Citi then says that a general election may happen and the new UK government may trigger Article 50 once they come to power

However, it also predicts that another Scottish referendum may happen.

Citi's prediction is not out of this world — Dr. Peter Catterall of Westminster University in a Facebook Live interview with Business Insider said on Monday that a Brexit was unlikely to happen until after a General Election.

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Brexit: The Movie (Video)

Brexit: The Movie

2016 

Should Britain stay in or exit the European Union? On June 23, 2016, voters can voice which side of the issue they fall on when they take part in a public referendum. In the lead-up to this crucial vote, the new feature-length documentary titled Brexit: The Movie poses an emphatic and persuasive argument for leaving the EU.

A collaboration between 28 European countries, the EU began in the aftermath of World War II. Back then, it was largely viewed as a noble endeavor designed to enhance economic stability and peaceful interests across the continent. But increasing opposition contends that the EU has become nothing but a corrupt and all-powerful political tool which effectively works against the will of the very people it should serve. In their view, the EU proposes and passes new laws and regulations which negatively impact ordinary citizens while benefiting the bureaucrats and select few corporations who remain beyond reproach.

The film explores the formation and make-up of the EU, the lack of transparency and accountability in their operations, the plight of industries and individuals who have struggled under their rule, and warns of their capacity for creating economic calamity, inefficient living conditions, and barriers to advantageous trade deals with other regions throughout the globe.

What would a move away from the EU mean for Britain? The film travels to Switzerland, a country that has steadfastly refused to join the EU, to find the answer. What the filmmakers discover is a country steeped in growing wealth, decreasing unemployment, and a quality of life many steps improved from their neighboring countries. The Swiss believe that their good fortunes are almost entirely a by-product of abstaining from the EU.

Brexit recognizes the EU referendum as one of the most consequential votes the citizens of Britain are likely to cast in their lifetime. After all, it's been more than 40 years since the fate of the organization was in the hands of the citizens. According to the film and its many interview subjects, the first and most egregious casualty of continued EU reign is democracy itself.

Directed by: Martin Durkin

The UK just got hit with 2 downgrades

• Akin Oyedele
 

• 18h
• 16,775
 
• 54
 

A store closing sale banner on a window next to the colors of the Union flag in London. Matt Dunham/AP

Two major rating agencies downgraded the United Kingdom's credit rating on Monday.

S&P Global Ratings lowered the UK to AA from AAA, with a "negative" outlook. And, Fitch cut its rating to AA from AA+, with a negative outlook as well.

The downgrades come following the UK's surprise vote to leave the European Union last week.

Brexit "is a seminal event, and will lead to a less predictable, stable, and effective policy framework in the UK," S&P said in a statement.

While AA is still a solid rating from both agencies, these actions indicate that they are less confident in the UK's ability to repay its sovereign debt following the Brexit vote. Over the weekend, several analysts warned about the risk of an outright recession hitting the country, with Goldman Sachs analysts forecasting one next year.

S&P added that the vote for Remain in Scotland and Northern Ireland creates wider constitutional issues for the whole country. The agency pointed out risks to the pound's role as a reserve currency; it suffered its biggest plunge ever against the dollar on Friday.

"The negative outlook reflects the risk to economic prospects, fiscal and external performance, and the role of sterling as a reserve currency, as well as risks to the constitutional and economic integrity of the UK if there is another referendum on Scottish independence," S&P said.

In its statement, Fitch said the referendum outcome will cause a sudden slowdown in short-term GDP growth, and discourage business investment.

Fitch also lowered its GDP forecast to 1.6% in 2016 from 1.9%, and 0.9% in 2017 from 2%. In the medium term, Fitch is concerned that less favorable trade terms for exports to the EU, lower immigration, and reduced foreign direct investment would dampen growth.

On Friday, Moody's Investors Service, another ratings agency, lowered its outlook on the UK's credit rating to "negative" from "stable."

SEE ALSO: Welcome to the 'Brangover'

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Google is reportedly working on its own line of smartphones

• James Cook
 
•   

• Jun. 27, 2016, 4:26 AM
• 4,896
 
• 3
 

Google CEO Sundar Pichai.AP

Alphabet-C  $678.63

GOOG

+/-+10.42

%+1.60

Disclaimer

Google is reportedly working on developing its own smartphone,according to The Telegraph.

Right now the company licenses the Nexus line of phones with companies like LG and Huawei, but The Telegraph says Google wants to develop the smartphones itself in future.

Owning its own line of smartphones would allow Google to control everything about the Android ecosystem. It already manages the software through Android, which it lets other manufacturers use on their devices. But The Telegraph suggests that Google wants to go one step further.

There's no clear timeline for when Google will release its own smartphones, but The Telegraph says the phones are expected to be released by the end of the year.

Google declined to comment when contacted by The Telegraph.

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More: Google