(Justin Vaughn, Editor, Options Trading Report)
After days of anxiety and frustrations over the debt-ceiling crisis, investors and traders took on a more optimistic outlook as the market closed on Friday. And the indices all were positive. The Dow Jones Industrial Average jumped 300 points while the S&P 500 and the technology minded Nasdaq Composite were up 1.3% and 2.2% respectively. The general consensus on the ‘Street’ was that progress was being made with an agreement not that far off. “If the market felt the deal wasn’t going to get done, we would have started to see a precipitous sell off by this point,” said Brett Bernstein, CEO and Cofounder of XML Financial Group. Wednesday’s market opened with uneasiness, as the indexes all wavered, with the Dow Jones Industrial Average off 134 points, while the S&P 500 and Nasdaq Composite edging down 25 and 82 points respectively. Oil bounced to $72.00 a barrel, up from a precarious low of $69.46, as players digested progress on the debt-ceiling crisis. Adding ‘fuel’ to the shaky market, is the conflict between China and Saudi Arabia over Russia’s heavy dumping of low quality crude into the marketplace, with China and India accepting millions of barrels of their oil at significantly reduced prices. As the leader of OPEC, Saudi Arabia has instituted lower production with the cartel to firm up and stabilize crude price levels. As many countries boycott Russian oil, Russia looks to ‘dispose’ of excess reserves,at all costs.
Stocks livened up as the general ‘feeling’ on the Street was one of optimism that the crisis might be completed yet Thursday. Traders and Investors turned into buyers of high-tech and value securities, lifting the indexes.
Labor continues to baffle the recession equation. The Federal Reserve’s Jerome Powell and the Governors, in making their monthly rate hike decisions are stymied, confused with the consistency of strong unemployment numbers and wage levels, staying firm. Recent robust labor numbers, released by the Labor Department, show April’s job openings at 10.1 million, up from 9.7 million in March, while layoffs were falling. As mentioned above, labor has defied ‘fitting-in’ into the recession equation, giving monthly signals that just maybe a recession might vary, or possibly no recession at all. “Demand is still strong and the labor market is very active,” said Dawn Fay, operational President at job place firm, Rober Half. “We’re not really seeing any pockets of weakness. May employment numbers will be released Friday.
According to the International Monetary Fund, our tasty olive oil is the oil of choice, and is in the spotlight! Olive oil, America’s favorite ‘dipping oil’ is up a whopping 46%, with a metric ton trading at $6,269.63. No matter the brand of choice, your purchase will be significantly higher at the store…and will edge higher for the future. Serious drought in Spain, one the the biggest producers of nearly 40% of the world’s olive oil suffered the highest temperatures ever, and received almost no rain for months, according to Spain’s Ministry of Agriculture, Fisheries and Food. Projections for the March harvest are down severely to 680,000 tons of olive oil, half of what the average was the last five years, a serious setback for a staple on the American table. Spain and Portuguese researchers are scrambling to help olive farmers in their quest to maintain upcoming crops. Both countries have established funds to soften the financial losses for the farmers.
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RUMBLINGS ON THE STREET
Matt Gertken and Chester Ntonifor, of BCA Research’s chief geopolitical Strategist and chief foreign-exchange strategist, respectively, Barron’s “Indeed, superintelligent AI could boost economic growth by 30-100-fold, comparable to the impact of the agricultural or industrial revolutions, according to a research note.”
Christopher Rolland, Susquehanna International senior chip analyst, who speculated that Nvidia might have produced “the greatest beat of all time, Barron’s “It looks like the new gold rush is upon us, and NVDA is selling all the picks and shovels.”
Randall W. Forsyth, lead writer for Barron’s “UP & DOWN WALL STREET,” “During the 1970’s, bonds came to be called ‘certificates of confiscation,’ as they lost value in real terms. Gold soared above $800 by January 1980, from its former fixed price of $35 an ounce under the Bretton Woods Monetary System. So the precious metal served as an offset to this inflation tax on fixed-income assets. Once again, the yellow metal appears to be warning of the coming debt storm.”
Gregory Daco, chief economist at the consulting firm EY-Parthenon, WSJ “We are not in an economy that’s retrenching.”