Tuesday, October 11, 2016

Markets retreat as earnings season begins and oil prices fall

Dow tumbled 200, decliners over advancers a very big 8-1 & NAZ lost 81.  The MLP index gave back 1+ to the 311s & the REIT index fell 3+ to the 335s.  Junk bond funds were weak & Treasuries saw more selling.  Oil went below 51 (more below) & gold drifted lower.

AMJ (Alerian MLP Index tracking fund)

stock chart

3 Stocks You Should Own Right Now - Click Here!

Live 24 hours gold chart [Kitco Inc.]

OPEC is not interested in or targeting a specific oil price, its Secretary General Mohammed Barkindo said.  "It's not an issue of price at the moment. Until we get the market to rebalance we will not be able to achieve a fair price," Barkindo said at the World Energy Congress in Istanbul.
Oil fell almost 2%, retreating from one-year highs, after mixed responses by Russian oil industry officials toward an OPEC call for all major crude producers to cut output.  The International Energy Agency, the energy watchdog of the West, also said it was unclear how rapidly global oil supply could fall in line with demand even if Russia & OPEC agreed on a steep cut.  A crude glut has forced prices down from mid-2014 highs above $100 a barrel.  Brent crude oil was down $1 (1.9%), at $52.14, off the one-year high of $53.73 hit yesterday.  West Texas Intermediate (WTI) crude slipped 90¢ (1.8%) to $50.45.  Global oil industry officials in Istanbul for the World Energy Conference issued a raft of statements on OPEC's first planned production cut in 8 years.  The energy ministers of Saudi Arabia & Russia intend to hold further consultations in Riyadh after the Istanbul meeting, the Saudi energy ministry said.  Igor Sechin, Russia's most influential oil executive & the head of Rosneft, said his company will not cut or freeze oil production as part of a possible agreement with OPEC.

Is the debt burden starting to weigh more heavily on US consumers?  The median respondent to a monthly Federal Reserve Bank of New York survey reported the highest probability of missing a minimum debt payment over the next 3 months in Sep since Feb 2014.  The rise has been most pronounced among those earning the least income, but higher-income respondents see higher chances of missing a payment as well.

U.S. Consumer Debt Stings as Delinquency Chances Increase: Chart

Earnings season started on the wrong foot for the stock market.  Alcoa (AA) earnings are haunting the stock market & bank earnings can be iffy.  Meanwhile oil's rally is being questioned as some are wondering how long the honeymoon between OPEC & Russia will last.  Dow is back to hanging in above 18K & that is turning out to be an important support level.  The bulls may not be able to support stocks if its falls below 18K.

Dow Jones Industrials

stock chart

No comments: