Norways $1 trillion sovereign wealth fund may exit oil investments

Norway, home to the world's largest sovereign wealth fund at $1 trillion, has proposed dropping oil and gas investments in order to reduce the country's exposure to oil price fluctuations. Norges Bank Investment Management size is indeed massive, controlling roughly 1.5% of the world's total stocks.

Of course, the move itself is not as drastic as it sounds, since about 20% of Norway's economy is already based on oil and gas production. The fund previously divested itself of coal stocks in response to environmental concerns. Roughly 6%, or $37 billion, of the fund's equity index is currently invested in oil and gas stocks. Norway’s Finance Ministry will study the proposal and afterwards make a decision on the proposal. The entire process is expected to take years.

More details can be found below:
https://www.bloomberg.com/news/articles/2017-11-17/norway-idea-to-exit-oil-stocks-is-shot-heard-around-the-world

Saudi Arabia anti-corruption sweep

Over the weekend, Saudi Arabia launched a large anti-corruption sweep of the elite in a large-scale operation that saw many royal family members detained, including the powerful businessman Prince Al-Waleed of the Kingdom Holding Company. Detainees were held at the Ritz-Carlton hotel in Riyadh.

How the Ritz Carlton became a temporary prison: https://www.theguardian.com/world/2017/nov/06/how-saudi-elite-became-five-star-prisoners-at-the-riyadh-ritz-carlton

Experts had questioned whether corruption and potential internal opposition might slow Crown Prince Mohammed's economic modernization plan, Vision 2030. By consolidating power, the prince's ability to shape Saudi will be greatly strengthened in the extended term. In this scenario, Saudi will be better off and the news may be bullish for crude prices. Other analysts believe it may be bearish for crude prices, by delaying the kingdom in the near term as it would want more oil revenue to stabilize internal affairs (keeping generous subsidies for energy, food, and social services in place longer than originally planned).

While uncertainty remains in this issue, one things has become apparent. Saudi-led OPEC is not nearly as powerful as it once was. Thirty years ago, news of political upheaval like this could have send crude prices soaring. This week, we saw a jump on Monday that subsided into Tuesday, and again today. The emergence of North American shale oil has truly changed the calculus of the international oil markets.

For more details, see: https://www.washingtonpost.com/business/economy/what-the-royal-purge-means-for-saudi-arabia--and-its-oil/2017/11/06/9cba9142-c256-11e7-afe9-4f60b5a6c4a0_story.html

Information Technology, keep on trucking!

Occasionally it's helpful to just dive into those very messy details, so let's do just that. For the US stock market, the rally since President Trump's election has been driven by Financials (unsurprising since they've had great tailwinds from multiple sources) and... Information Technology, or the Fearsome Fivesome as I like to call them. You know who they are. Apple, Alphabet (ie "all-knowing" Google), Amazon, Microsoft, and Facebook, in no particular order.

For October, the Technology sector by far and wide outshone all other equity sectors, having its best month since 2016. As an investor, it's important to see where the so-called "smart money" is going, because when the tide is rising, all the boats are lifted! The opposite is also true of course, but why fight the tide? Sometimes going with the flow seems to work out best (which is why that, although I would never speculate in bitcoin - and, mind you, speculate is the right word here - neither would I short the stuff, assuming futures contracts will exist in the near future).

Zacks has some solid information on how and why technology performed so well, and some additional info on fund flows to boot! Link below.
https://www.zacks.com/stock/news/281258/5-red-hot-tech-stocks-that-sent-sampp-500-etf-higher