Surprise! OPEC agrees that an output cut is in order

In the game of chicken between OPEC, Russia, and USA shale producers, it appears that OPEC has blinked first. The Organization of the Petroleum Exporting Countries agreed to cap production in the  range of 32.5-33.0 million barrels per day. Saudi Arabia would bear the brunt of output cuts from current levels of production.

Analysts seem unsure of whether this "understanding" will be effectively enforced across member countries.

https://www.bloomberg.com/news/articles/2016-09-28/opec-said-to-agree-on-first-oil-output-cut-in-eight-years

Sarepta Pharmaceuticals: FDA drug approval amid panel protest

Absolutely on-point article regarding the recent approval of Sarepta Pharmaceutical's DMD drug Exondys 51 (eteplirsen). There is no doubt that DMD is a horrible disease and any potential treatment of that disease must be expedited. However, the efficacy of Sarepta's drug was questioned by the FDA's own medical panel.

Amid prior mistakes and botched FDA submissions, Sarepta launched a public relations coup, with many parents of children with DMD traveling to Washington DC to lobby the FDA directly to approve etepirsen. Ultimately, the FDA's head of drug review division approved the medication, overruling the FDA's own medical panel amid some bitter intra-agency dissent.

The FDA has struggled recently with bureaucratic processes that would bring badly-needed drugs to the market faster, while trying to maintain the same strict efficacy requirements that have been in place for decades.

Amid pressing news in other sectors, this approval stands out as very unusual and quite news worthy. Statnews does an excellent job covering the topic in the article hyperlinked below.

https://www.statnews.com/pharmalot/2016/09/19/sarepta-fda-duchenne-behind-the-decision/

The election race between Trump and Clinton has surprisingly tightened

We find ourselves with the unexpected situation where Donald Trump, having emerged as the Republican contender for the office of President, is facing off against Hillary Clinton.

Initially, this was forecast to be an easy victory for Clinton, but like the Brexit vote several months back, perhaps analysts are in for further surprises down the road as polls indicate the two are locked in a tight race nationally.

This has a direct impact on equity markets since the approach of the two candidates are decidedly different, with Trump assumed to hold to the Republican plank for less taxes and less business regulation (the financial sector - banks in particular - would appear to be most sensitive to this election).

https://www.cbsnews.com/news/donald-trump-and-hillary-clinton-locked-in-tight-race-nationally-cbsnyt-poll/

Energy M&A: Canada's Enbridge buying Houston's Spectra Energy for $28 BILLION

This is a BIG deal. On top of the massive price tag (and netting bankers about $100M in fees alone), this is the largest M&A deal to be completed since 2014, when oil prices collapsed. If the deal is completed, the emerging entity will be the largest North American energy infrastructure company.

However, it should be noted that both of these companies are operating more in the midstream segment, and upstream producers aren't out of the woods yet. However, crude prices have recovered significantly from the lows seen on August 1st. High margin, low cost producers seem to be on the hunt for well-valued companies, with EOG Resources announcing that it will acquire privately-held Yates Petroleum Corp for $2.5 billion.

https://www.reuters.com/article/us-spectra-energy-m-a-enbridge-inc/enbridge-buying-spectra-in-28-billion-deal-idUSKCN11C13H

Oklahoma: Earthquakes, Fracking, and Infrastructure

Oklahoma experienced a 5.6 (Moment) Magnitude earthquake over the weekend, the most powerful recorded in that state. Recent pickup in minor tremor activity around areas near US shale deposits have posed the question of whether fracking could bear some responsibility. Although a proven connection between earthquakes and fracking hasn't yet been made, there does appear to be a strong correlation between the two, which could potentially affect the US fracking industry.

On another note, infrastructure in in the Midwest is sadly unprepared for a potential earthquake in the region. The New Madrid Fault Line isn't a joke. It's time for every state to implement some kind of seismic design requirements.


https://www.theguardian.com/world/2016/sep/03/oklahoma-earthquake-nebraska-north-texas