I had assumed that Goldman would pimp oil when it was at $68. Instead, they did it after it corrected:
From their morning research:
Concerns over economic growth and weak oil statistics led a commodity sell-off. We believe concerns over Chinese loan growth, a disappointing headline US durable goods report and weak US oil statistics led a sell-off across the commodity complex today, including a $4.29/bbl (6.4%) decline in WTI crude prices. In our July 27 Energy Weekly we underscored the downside risks to crude oil prices following the recent back-end led rally as technical and credit difficulties have limited the ability of some refiners to take advantage of better refinery economics and as long-dated prices have once again moved above levels consistent with industry economics. However, we believe that the drivers of today’s sell-off are less negative for market fundamentals than they first appear.
The upgrade of GE:
We are upgrading GE to Buy from Neutral and raising our 12-month target to $15 (22% upside potential) from $13 as comments reported after the close by US House Financial Services Chairman Barney Frank suggest broadening support for regulatory reform that would not mandate the separation of GE Capital. While numerous uncertainties remain, we are reducing our probability assumption for a costly GECS separation to 25% from 50% and this drives our higher target. Greater potential for a manageable regulatory outcome should prompt investors to focus on longer-term benefits of economic and credit stabilization to GE shares.
GS main 0730
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