Tag Archives: market

January 2015 – Turbulence Rules the Markets

Some market watchers hold that January sets the tone for the rest of the year. If this January is any indication we are in for a bumpy ride. The markets have reacted to cross winds both international and domestic.Continue Reading

Oil Price War – Saudis up Ante Cutting Prices Another $2.00 Per Gallon

The State owned company Saudi Aramco announced that it is cutting prices to a record low $2.00 per barrel discount to Asia, Europe and all grades of crude to US refineries. To reinforce Saudi Arabia’s vow to crush US oil shale producers, Saudi prince, Turki Al-Faisal said: “Saudi Arabia won’t give up oil market share at this time for anybody.”Continue Reading

Is the Bond Market Ready to Crash?

The media hype is for a sharp sell off in the bond market. Some “gloom and doom” pundits are even predicting a crash that will plummet the world into a worldwide depression. The US Federal Reserve has ended its $4.5 trillion bond purchase program. Fed Chairperson, Janet Yellen, has maintained a “stead as she goes” policy without a definitive time frame for raising rates. This has left analysts in a state of suspended animation.Continue Reading

What Happened to the Oil Market?

While the focus has been on the Dow Jones Industrials and the S & P, there is another sea change taking place in the energy markets. This past summer the benchmark West Texas Intermediate (WTI) crude was trading near $107.00 per barrel. This past week we saw a low of $79.78 per barrel in the December futures contract, hitting a four year low.Continue Reading

Why are Oil Prices Falling in the Midst of Mid-East Chaos?

The oil market is one of the most illusive and difficult markets to understand. In past decades it was simple. OPEC controlled prices. When prices got too low, they cut production and prices rose. Now, however, we no longer have a single group in charge. The market is fraught with trends and counter trends that create confusion and places traders on edge. Just about a month ago, West Texas Intermediate (WTI), the US benchmark, was trading at $106-$107 per barrel. This Friday prices have dropped to $93.65 per barrel for October delivery. There are rumors of a price drop to $70-$80 per barrel.Continue Reading

Where is the Price of Gold Headed?

The markets have turned in a strange performance over the past several weeks. The numbers on the economy came in weaker than expected with GDP down -.1% in April. Unlike other recoveries, spending growth has decelerated. Each year it takes a step down. This is not the way it should be. In all past recoveries, spending growth increased as the economy grew. Discretionary spending was up but 90% of that was due to inflation, especially in food and energy. Consumers are being forced to spend more. Our US deficit is running at about $17.3 trillion. The US Federal Reserve’s Balance Sheet has grown to $4.9 trillion. Surprisingly, the US stock market made a new all time high in the Dow and S & P. Gold, on the other hand, fell to its lowest level in the past 15 weeks.Continue Reading

Why there is Falling Unemployment and a Drop in the Dow?

On Friday, the Labor Department reported an increase of 288,000 new jobs. The unemployment rate fell to 6.3%, the lowest in 5 ½ years. At the outset this was good news for the market, but as the day wore on, the Dow Jones Averages started to fade and ended down 45.98 points. What should have been a rip roaring rally fizzled. Some blamed the crisis in Ukraine.Continue Reading

High Speed Trading

In the early days of stock trading prices came across a ticker tape. It posted the stock symbol and the volume. The tape ran at one speed and traders would follow the buying and selling by analyzing the tape. The great traders were able to mentally track price action and make instant trading decisions, almost like a card counter does in Blackjack. One popular past time was for investors to gather in a large sitting room and watch the ticker tape during trading hours.Continue Reading

2014 First Quarter-A Mood Shift

The year 2013 ended on a high note with the S & P up a whopping 29.6% for the year. The first quarter 2013 saw the S & P up 10%. The Russell that includes small and mid cap securities rocketed up 37%. With that stellar performance investors looked to 2014 with rare optimism. Only 16% of investors were bearish. However, starting on day one of 2014 the markets and the world turned turbulent. The major averages sold off sharply, then recovered to end the quarter barely nudging from their 2013 levels. The Russell did not fare as well. It was down 4.7% for the quarter, pointing to an exodus from small and mid cap stocks. The average investor pulled $4 billion out of mutual funds.Continue Reading

The Fed’s New Policy Changes. What are they Telling Investors?

Could the Fed’s new policy changes signal the end of the bull market? There is a often quoted saying: “Don’t fight the Fed.” If that is the case, perhaps it’s time to step back and analyze exacting what took place this week. The Fed uses two ways to communicate with the public. It holds eight meetings each year. The Chairperson, in this case Janet Yellen, issues a consensus statement on overall Fed policy and issues some guidance going forward. The second and equally powerful communication comes from the minutes of the Federal Open Market Committee (FOMC) whose job it is to oversea the Fed’s market operations and steer interest rates in line with committee consensus.Continue Reading