Stocks traded off today but the volume was light and the closing mark was well off the lows of the day which occurred during amateur hour. The Dow finished off 26 points to 17,977. This week will feature the earnings report from Apple (Tuesday) and a meeting by the Federal Reserve about interest rates, the global economy and who the Washington Redskins will take in the upcoming NFL draft.
Oil prices pulled back today as news of a sudden spike in US stockpiles coupled with a report from banks that the recent run-up in price is not based on fundamentals. Other analysts are saying that in order to understand the price of oil these days one needs to understand the dynamics of the relationship between Saudi Arabia and Iran. Good luck with that! WTI crude fell about 2.2% and closed at $42.70.
Gold was up $10 an ounce to $1,240. The Federal Reserve is not expected to raise interest rates. This thinking is causing the US dollar to ease back a bit which is good for gold. Economists are worried about global growth which is influenced by real-estate with is dependence on interest rates. In many countries like South Korea, China and Turkey the majority of individual net worth is in real-estate so you can see how critical it is. People do not have access to well-developed stock and bond markets like we Yankee’s do. An article in Bloomberg today talked about the real-estate market in Turkey and how it has held up well but might drop and pummel Turkish banks if the US Federal Reserve hikes rates again. The article reveals the potential ripple effects that a rate hike in America can have. It also tells me that interest rates are a powerful tool. Instead of bombing someone we can just increase interest rates and their economy goes in the tank.