Don’t worry when US mar­ket goes crazy

China Daily (USA) - - BUSINESS - By BLOOMBERG

In the hours af­ter the US Pres­i­dent is elected, equity in­vestors need to brace for volatil­ity. What they shouldn’t do is panic.

That’s be­cause re­gard­less of how prices re­act on Wed­nes­day, next-day­movesin theS&P 500 In­dex are use­less in telling what comes af­ter. While the in­dex swings an av­er­age 1.5 per­cent the day af­ter the vote, gains or losses over the first 24 hours pre­dict the mar­ket’s di­rec­tion 12 months later less than half the time.

This mat­ters be­cause the com­pul­sion to act in the vote’s aftermath is of­ten very strong — stocks swing twice as vi­o­lently as nor­mal those days, data com­piled by Bloomberg show. They plum­meted 5 per­cent just af­ter Barack Obama beat John McCain in 2008. But while noth­ing says Wed­nes­day’s re­ac­tion won’t be a harbinger for the year, noth­ing says it will, ei­ther, and in­vestors should think be­fore do­ing any­thing rash.

“Try­ing to trade that is very dif­fi­cult,” saidThomasMelcher, the Philadel­phia-based chief in­vest­ment of­fi­cer at PNC As­set Man­age­ment Group. “Even if the mar­ket sells off, if you have any rea­son­able time hori­zon, that should be a buy­ing op­por­tu­nity. The dust will set­tle and peo­ple will con­clude the econ­omy is OK.”

In the 22 elec­tions go­ing back to 1928, the S&P 500 has fallen 15 times the day af­ter polls close, for an av­er­age loss of 1.8 per­cent. Stocks re­versed course­and­moved­higher over the next 12 months in nine of those in­stances, ac­cord­ing to data com­piled by Bloomberg.

Noth­ing shows the un­re­li­a­bil­ity of first-day sig­nals more than the routs that ac­com­pa­nied vic­to­ries by Obama, whose elec­tion in the midst of the 2008 fi­nan­cial cri­sis pre­ceded a two-day plunge in which more than $2 tril­lion of global share value was erased. It wasn’t much bet­ter in 2012, when Elec­tion Day was fol­lowed by a two-day drop that swelled to 3.6 per­cent in the S&P 500, at the time the worst drop in a year.

Of course, Obama has been any­thing but bad for equities — or at least, he hasn’t got­ten in their way. The S&P 500 has posted an av­er­age an­nual gain of 13.3 per­cent since Nov 4, 2008, bet­ter than nine of the pre­vi­ous 12 ad­min­is­tra­tions. Data like that im­plies in­vestors strug­gle to process the mean­ing of a new pres­i­dent just af­ter Elec­tion­Day, or in­fuse the win­ner with greater in­flu­ence than they have.

The com­pany es­ti­mated that it could ex­tract 1.8 bil­lion to 2.4 bil­lion bar­rels of crude from the oil­field, and the pro­duc­tion level would make the field more pro­lific than the oil­field dis­cov­ered by ExxonMo­bil off the South Amer­i­can coast of Guyana in 2015.

Based on two wells drilled ear­lier this year along with ex­ist­ing 3D seis­mic data, it has es­ti­mated the oil in place un­der the cur­rent Smith Bay lease­hold at 6 bil­lion bar­rels.

De­spite the fact that its de­vel­op­ment will not be easy, it could pro­duce up to 200,000 bar­rels per day, it said.

“It’s ofa­size­and­scale thatwe can bring it on, such that it will have an im­pact on the (Tran­sAlaska Pipe­line Sys­tem) go­ing for­ward, which to me is what ev­ery­body in this state ought to be fo­cus­ing on — how do we keep the pipe­line up and full and run­ning,” Caelus CEO and founder Jim Mus­sel­man was quoted as say­ing in an in­ter­viewwith Petro Glob­alNews.

Ac­cord­ing to pub­lic records, Nuoxin is a com­pre­hen­sive fi­nan­cial hold­ing group that started with tra­di­tional fi­nan­cial ser­vices and ex­panded grad­u­ally to in­dus­trial in­vest­ment, wealth man­age­ment, se­cu­ri­ties, fac­tor­ing and fi­nan­cial leas­ing.

It has also set up an as­set man­age­ment com­pany in the United States, said the com­pany.

NordAq, owner of the bay where the project is lo­cated, owns around 550,000 acres (222,576 hectares) of high­qual­ity and easy-to-drill oil fields in the Cook In­let and the North Slope, worth a to­tal of over $100 bil­lion.

Eye­ing the huge po­ten­tial in NordAq’s vast re­sources and great value, the­com­pany signed as­trate­gic in­vest­men­tand­co­op­er­a­tion agree­ment with the com­pany in July 2014, as the first step to­ward its en­ergy in­vest­ment abroad, saidYang.

max­i­mum crude out­put in newly dis­cov­ered Alaska oil­field

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