Stocks continue to hold near high levels despite weakness in oil prices and earnings reports that are tepid. The Dow closed up 106 points on light volume to finish the day at 18,004. While stocks continue in rally mode the consumer comfort level with the economy remains weak and the low volume rally suggests it has many doubters.
Earnings reports have been coming in and in particular the big banks have been posting lower than expected results thanks to lower trading revenues and increased reserve additions in anticipation of loan losses related to the energy sector. Bank stocks have responded by moving a bit higher but are most likely range bound until the feds raise interest rates.
This past weekend was the big “oil freeze” meeting in Doha, Qatar and by all accounts it was a bust. Iran pulled out at the last minute saying it will boost daily production by another 300,000 barrels per day before it would consider talking about a freeze. Saudi Arabia said that in order to protect market share it was willing to match any increase coming from Iran. Venezuela was distraught after the meeting since oil is the life blood of their economy which has seen its GDP shrink like shrimp in a fry pan. Oil prices fell on Monday with WTI crude off 1.1% to $39.91 a barrel.
Gold continues to hold up well and was unchanged on the day closing at $1,234 an ounce.