(as of 7:05 AM PST)
The relief rally this morning was small and very short lived as equities continued to decline after a small opening market rise. Yesterday's sharp drop, across all indexes and sectors, rattled investors with an average decline of 1.5%. Oil is a big story in that we are seeing low prices not seen in years. A barrel of oil recently dropped below $88 and that is sure to mean lower prices at the pump will follow. Low oil prices are generally seen as similar to a tax cut because they free up consumers to spend money elsewhere, a real positive for the longer term. But the short term looks ugly. US economic data is positive but the rest of the world seems to be looking at lower growth and even recession. On the plus side, with a surging US dollar the Federal Reserve may look to hold interest rates lower for longer, which always seems to appease investors and analysts. The release of Federal Reserve minutes might spur some buying this afternoon. Precious metals are on the upswing while interest rates are steady.
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