The markets today resembled my thrashed NCAA brackets thanks to Facebook (aka Virginia) which was alleged to have been hit with a data breach (aka UMBC) dating back in 2014. Facebook says it was not a breach, rather they were deceived by a college professor but others beg to differ and an investigation is on the way. Facebook shares were lower in reaction to the news. Some gurus are calling this a buying opportunity but whether or not this is the case, one thing is for sure, “headline risk” is alive and well in 2018. At the close the Dow was off 335 points on lighter volume to 24,610.
The Federal Reserve meets this week and it is expected that they will raise interest rates by a quarter point to a range of 1.5% - 1.75% with an announcement coming on Wednesday afternoon. The gurus will be looking for tidbits in the fed comment section so they can fine tune forward guidance related to inflation and GDP growth.
According to CNBC, global oil production is on the rise and later this year oil markets could be hit with another glut. The US rig count hit 800 last week and production has climbed to 10.38 MBPD putting the US second in oil production behind Russia which currently produces 11 MBPD. Canada and Brazil are also experiencing rising oil production while on the flip side, Venezuela production is falling while supplies out of the Middle East are subject to disruption. Iran faces sanctions from both the US and Europe related to it ballistic missile program and its involvement in the Syrian/Yemen conflict. The Crown Prince of Saudi Arabia visits the White House this week and he is expected to be critical of Iran while he is here. WTI crude oil today closed at $62.05 down 0.47%. The prospects of lower oil prices later this year could be why the Dow transportation index was up today in a down market.