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T3's Take 3: Crude Oil Leads the Way Higher


Today's financial recap and tomorrow's financial outlook.

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Crude Oil Spikes

Crude oil prices rallied 3.8% to $47.89 today, helping the bulls make one more shot at new highs.

United Arab Emirates Energy Minister Suhail Al Mazrouei said that an economic recovery in Europe and a decline in shale output are signs that higher oil prices are coming.

Meanwhile, traders expect refiners to boost utlilization, which in turn will increase demand for crude oil, pushing up prices.

In addition, Libya's National Oil Corp. declared force majeure, which allows it to suspend crude oil demand shipments.

Last week, the Baker Hughes US Rig Count fell to just 775, which is well below the lows seen in the 2008-2009 oil collapse. This could indicate that supply and demand in oil markets is starting to balance out following a drop in production.

Stocks Make a Modest Move Higher

Yesterday, the NASDAQ 100 and its corresponding QQQ ETF, broke out to new all-time highs on surges in large-cap technology and biotechnology stocks.

Today, the S&P 500 crawled a little closer to its own all-time high of 2134.72, set back on July 20.

The S&P hit 2116.48 intraday, less than 1% from the record, before settling to close at 2109.79, up 0.3% on the day.

The big rally in crude oil lit a fire under energy stocks, which were by far and away the day's best performers.

The Energy Select SPDR ETF (XLE) rose 2.6%.

Emerging markets, small caps, and retail names also performed well.

FitBit Reports Earnings

Yesterday after the close, fitness band maker FitBit (FIT) reported third-quarter earnings. 

The company reported a profit of 19 cents a share, blowing away the 10 cents a share consensus estimate. FitBit also blew away revenue forecasts, and significantly raised its full-year

However, the stock took an 8.6% hit today after the company said it will sell 7 million shares in addition to the 14 million expected at an upcoming lockup.

Traders remain very cautious towards FitBit. According to Bloomberg, 42% of the float is currently sold short.

Wednesday Preview

In US economics tomorrow, the big report is the ADP Employment Change, which may give a preview of Friday's big NFP report, and a hint of the Fed's next move.  Traders will also be watching the crude oil inventory numbres following today's pop.

Overseas, the ECB's Mario Draghi is speaking, as is Reserve Bank of Australia Governor Stevens. Canade's Trade Balance and UK PMI will also be released.

In earnings, Allergan (AGN), Chesapeake Energy (CHK), Michael Kors (KORS), and Regeneron Pharma (REGN) report before the open. 

Dynegy (DYN), Facebook (FB), FireEye (FEYE), and Qualcomm (QCOM) report after the close.
No positions in stocks mentioned.
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