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OPEC has ushered in QE4, and how investors should play oil now

MARKETWATCH 5:59 AM ET 11/28/14

Symbol Last Price Change
KSS 58.67down 0 (0%)
WMT 84.98up 0 (0%)
BBY 38.75up 0 (0%)
AAPL 119up 0 (0%)
JBLU 13.6up 0 (0%)
SNE 21.69down 0 (0%)
PDCE 38.53up 0 (0%)
PXD 160.81down 0 (0%)
DNR 9.74down 0 (0%)
HK 2.87down 0 (0%)
NOG 10.78down 0 (0%)
EGN 65.88down 0 (0%)
MTDR 21.15down 0 (0%)
GPOR 50.57down 0 (0%)
WLL 53.14down 0 (0%)
CHK 23.04down 0 (0%)
SDPI 5.56down 0 (0%)
QUOTES AS OF 04:01:40 PM ET 11/26/2014
By Barbara Kollmeyer, MarketWatch Critical intelligence before the U.S. market opens

Welcome to the new era of QE4.

As if on cue, OPEC stepped in just as monetary policy (at least the Fed's) has dried up. Central bankers have nothing on the oil cartel that did just what everyone expected, but has still managed to crush oil prices.

Protest away about the 1% getting richer and how prior QE hasn't trickled down to those who really need it, but an oil cartel is coming to the rescue of America and others in the world right now.

It's hard to imagine a "more wide-reaching and effective stimulus measure than to lower the cost of gas at the pump for everyone globally," says Alpari U.K.'s Joshua Mahoney. "For this reason, we are effectively entering the era of QE4, with motorists able to allocate more of their money towards luxury items, while firms are now able to lower costs of production thus impacting the bottom line and raising profits."

The impact of that could be "bigger than anything that has come before," says Mahoney, who expects that theory to be tested and proved, via sales on Black Friday and the holiday season overall. In short, a consumer-spending explosion as we race to the malls on a full tank of cheap gas.

Tossing in his own two cents in the wake of that OPEC decision, legendary investor Jim Rogers says it's a "fundamental positive for anybody who uses oil, who uses energy." Just not great if you're from Canada, Russia or Australia, he says. Or if you're the ECB, fretting about price deflation.

The only other thing going on is shopping today, and from a scan of Twitter, plenty are hot-footing it to the shops. London got the party started:

(https://twitter:com/HuffPostUKPics/status/538278229652799488 .)

Key market gauges

While a lot fewer desks will be peopled today, it's all about oil (CLF5). An eye-popping $5 has been knocked off WTI Intermediate -- down around 10% this week, as is Brent -- and it's been trading around $68, the lowest since May 2010. Gold(GCZ4) is also in the dumps, as that Swiss vote looms, which could be its own OPEC moment (See more in the Chart of the Day on gold). The dollar(USDJPY) is liking that oil move, up over 118 yen on the "good for the economy" argument.

Futures on the Dow (YMZ4) and the S&P (ESZ4) are sagging a bit, though techs might fare better. Energy stocks have been getting crushed everywhere, so don't be surprised to see that sector stick it to Wall Street on a short trading day. Australia's ASX 200 had a horrible day thanks to oil, while the Nikkei 225 surged over 1% as a weak yen sent exporters soaring on the view lower oil prices are going to stimulate world demand. Europe is weak, as oil names get clobbered.

The quote of the day

"We expect that a fall in the price to $60 and below is possible, but only during the first half, or rather by the end of the first half (of next year)" -- Russia's most powerful oil official Igor Sechin to an Austrian newspaper.

The economy

No numbers at all, but it's all about retail anyway and just how much U.S. shoppers are going to get out there and spend, spend, spend. Eurozone CPI was also a big deal today, and ECB Prez Draghi was yakking away on Thanksgiving Day about low inflation and a commitment to "additional unconventional instruments."

The buzz

Kohl's (KSS) , Wal-Mart(WMT) , Best Buy(BBY) and the usual Black Friday suspects are going to be grabbing the headlines today. Wal-Mart(WMT) says Thursday was its second-highest online sales day ever. "Last night was awesome," crowed the senior VP of merchandising Laura Phillips.

As you enter/entered the golden gates of Wal-Mart(WMT), though, expect to be greeted by unhappy elves, er employees, who aren't finding things so awesome on the shop floor.

Showing some Twitter savvy, #KohlsSweeps has been keeping plenty of Americans up all night and trending, with a sweepstakes game that involves a new question and $500 gift card giveaway every 15 minutes. Ho, ho, ho, who wouldn't go?

(https://twitter:com/Kohls/status/538192065784320001 .)

Apple (AAPL) has wasted $100 billion, Tim Cook's single biggest mistake, says Forbes. "Apple(AAPL) can do much better for itself now with its billions, rather than continue wasting them on nameless, faceless Wall Street mutual-fund managers."

JetBlue (JBLU) was spreading holiday cheer at the airport ahead of Thanksgiving. Not like those Russians, who make you push your own plane.

Sony (SNE) is developing an e-paper smartwatch. A what? The watch's face and band will be made of e-paper. Oh, I get it now.

Wunderlich says look for exploration and production companies to start announcing 2015 in force because now that the OPEC decision is in. They're going to have to put pen to paper and see what will happen now with production growth, estimates, and so on. (More in the Call of the Day)

Automakers are reporting next week, and November sales are set to best October's, says blogger Calculated Risk, who notes that 2015 should be the best year since 2006 for auto sales.

The chart of the day

Citi's Willem Buiter laid into gold in a note that snuck out the day before Thanksgiving, as many in the U.S. were merrily on their way to Grandmother's house, or wherever. He called it a "6,000-year-old bubble," useless and no better than shiny Bitcoin. Below is a chart that shows just how much gold has advanced in real terms versus nominal terms. This comes days after the Dutch repatriated some gold. Buiter is Dutch, of course.

And then he also incited a riot on Twitter:

(https://twitter:com/wmiddelkoop/status/538259656913993728 .)

(https://twitter:com/MoonSunTruth/status/538074044608675841 .)

Seriously, Willem, can't you see that crazy look in Jude Law's eyes?

(https://twitter:com/universaluk/status/536481814898950144 .)

The call(s) of the day

So OPEC has kept its production unchanged, as expected and now what do we do? Don't panic, says blogger Short Side of Long.

"One thing is for certain ... sentiment is extremely negative and prices are ridiculously oversold. However, this obviously does not mean that sentiment could not get even worse and prices even more oversold. After all let us not forget the crash of 2008, where prices fell from $150 per barrel towards $60 per barrel very quickly," says the Short Side's Tiho.

So stand on the sidelines and let the crescendo play out because "you don't have to buy the bottom tick," he says.

But keep your eyes open. Tiho says this a buying opportunity because long-term fundamentals are still sound for crude and even the shale boom isn't lifting supply dramatically. As this rout unfolds, he's watching Energy ETFs such as Rogers Energy (RJN) and the Brent Crude Fund (BNO), along with Oil Services ETF (OIH). If you've got nerves of steel, he suggests Seadrill (SDRL).

All this looks brave indeed as anything related to energy is getting absolutely pounded, from sea to shining sea. Analyst Jason Wangler has buy-ratings on several companies that are well-hedged into 2015 for lower oil prices: PDC Energy(PDCE) , Pioneer Natural Resources(PXD) , Denbury Resources(DNR) , Halcon Resources(HK) and Northern Oil and Gas(NOG)

Other plays if you're brave: Energen Corp.(EGN) , Matador Resources(MTDR) and Gulfport Energy(GPOR) , Whiting Petroleum(WLL) , along with Chesapeake Energy(CHK) and Superior Drilling Products(SDPI) , says Wangler.

Random reads

Easy target he may be these days, Roseanne Barr found out the hard way that some Bill Cosby jokes aren't funny.

"It was mental in there. It was crazy. It was absolutely disgusting, disgusting." That was Black Friday at Sainsburys in north-east London on Friday.

Drones and airliners are having far too many close calls lately.

Need to Know starts early and is updated until the opening bell, but to get it delivered once to your email box. Be sure to check the Need to Know item. The emailed version will be sent out at about 7 a.m. Eastern.

-Barbara Kollmeyer; 415-439-6400; [e-mail]

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11-28-140559ET
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