Daily Market Update – April 18, 2016 (8:45 AM)
The markets were buoyed last week by rumpors that the world’s major oil producers, of course, not including the United States, were going to come to an agreement on reducing production.
That would have the intended result of increasing the price of oil, particularly as the issue seems to be supply related, rather than weak demand.
All of those oil ministers met on Sunday and just as was the case 2 months earlier, when markets exalted in news of a production cut, this one fell through, too.
On the oienous side, reportedly the new Saudi Arabian oil minister is a young and combative guy, who is willing to take great pain in order to inflict great pain.
The great pain he wants to inflict is upon Iran, who is responsible for each of the last two attempts to drop production having fallen through.
Unlike the last time, when the markets really expressed their unwarranted shock, this morning seems to be taking it in stride.
It’s really hard to imagine that anyone really would have believed that Iran, after so many years of being limited in its sale of crude oil, would be now willing to take a cut, just as it is getting use to the flow of cash once again.
Hopefully, if oil continues lower, stocks won’t follow.
With crude oil down about 3% in the early trading, the muted response by stocks is a positive one, as the S&P 500 is, in a stealth sort of way, only about 3% away from its all time high.
With a couple of assignments last week, I do have some addittional cash to spend. With only one position as a potential rollover for the week and only one ex-dividend position, I wouldn’t mind supplementing some of that income.
With earnings getting underway with greater intensity this week and maybe with oil on the back burner, more emphasis could get placed on fundamentals.
Whether that’s good or bad is up for debate, but for now, the market seems to be accepting of earnings results that are mediocre, but still better than expected.
That’s usually what you do in life when your resolved to failure, but whatever works is fine by me.