The Markets - January 12, 2015
You may be enjoying the economic benefits of gas prices around two dollars a gallon, but last week investors were skeptical about the effect of low, low oil prices on companies' performance during 2015.
The Markets - January 5, 2015
"...bubbling crude; oil that is, black gold, Texas tea."
The decline in oil prices accelerated during the fourth quarter of 2014. The main culprit was a supply and demand imbalance. Increased production in the United States, which is currently the biggest oil producer in the world, means there is an ample supply of oil. However, slowing growth in China and other countries, along with relatively warm winter weather in the United States, has lowered demand.
The Markets - December 29, 2014
With gas hovering around $2 a gallon in many parts of the country, chances are you're smiling every time you fill up the tank.
The oil price drop, which is one of the biggest stories of 2014, is a twist on a familiar tale. Rising supply (production in non-OPEC countries, like the United States, increased) and falling demand (in Europe, Japan, and China) caused prices to move lower. In this case, they've moved a lot lower. Last summer, the price of crude oil was about $107 a barrel. Last week, it finished below $55 a barrel.
The Markets - December 22, 2014
Geopolitics and monetary policy and deflation! Oh my!
It was a wild, wild week. First, the Russian central bank announced a massive rate hike and the country's main deposit rate rose from 10.5 percent to 17 percent. The move was the largest single increase in Russian rates "since 1998, when Russian rates soared past 100 percent and the government defaulted on debt," according to Bloomberg.com.
The Markets - December 15, 2014
It was no fun to be an investor last week. The week prior, a commentary in The Wall Street Journal's blog, MoneyBeat, offered this insight:
"Falling oil prices are thought to be good for stocks because they stimulate consumer spending and hold down inflation. The lower costs support economic growth, boost corporate earnings, and lessen pressure on the Federal Reserve to raise interest rates. The stock market loves that mix."
The Markets - December 8, 2014
In the United States, it was more of the same ole, same ole...
The Dow Jones Industrial Average and Standard & Poor's 500 closed at record highs for the 34th time and 49th time this year, respectively. The impetus last week was a jobs report that far exceeded expectations. For the 10th consecutive month, more than 200,000 jobs have been created. That's the longest string of improvements since 1994, according to Reuters. Not only did U.S. employers hire the most new workers in three years, wages ticked higher, too. An expert cited by Barron's said the underlying report data was promising:
"The average workweek was 34.6 hours, up from 34.5, and where it was before the 2008 crisis. That level acts as an effective ceiling to additional hours and suggests employers will have to increase hiring, he says - hence the pop in bond yields. The 10-year U.S. Treasury bond yield jumped to 2.31 percent from 2.26 percent on Friday. (Bond prices move inversely to yields.)"
The Markets - December 1, 2014
If investors around the world were voting on their favorite stock market, there is little doubt U.S. markets would finish near the top. Barron's explained, "For the past three years, Wall Street has been trouncing the world's other markets, inducing investors to pile in and bail on other assets."