Stocks rallied today after stronger than expected Chinese economic data came out and eased fears of a global recession. Adding to that were comments from members of the Fed who indicated that more rate cuts were possible should the trade war get worse. At the closing bell the Dow was up 371 points to 26,378. Trading volume however was light.
Oil has been on a wild ride hitting a seven-month low yesterday on fears of oversupply and slowing global economic growth. Behind the scenes however members of the Saudi Royal family got off their collective duff and started working the phones to other oil producers saying they will not tolerate a continued slide in global oil prices and that production cuts could be required. The gurus generally feel that oil is range bound with $50 on the low end and $70 on the high end. When oil drops Saudi Arabia moves to raise prices and when oil goes over $70 President Trump starts tweeting. Meanwhile US producers continue to do what they do as evidenced by companies like Northern Oil and Gas which reported a 179% Q2 increase in its Bakken oil output. At the close of business today WTI crude stood at $52.98 up 3.58%.
I am starting to feel like the great Fidelity money manager Peter Lynch who, whenever he took a vacation, saw the markets tank! The past few days, the wife and I did the Eagle Lake loop hike near Twisp, WA. It was beautiful and I would like to take the lunkheads there on a trip and dare the life scouts to jump into Eagle Lake which was colder than a quail in the Klondike. The only problem however was that on the way out I took a wrong turn due to it not having a sign at the trail junction and me not taking the time to make sure we were on the right trail. My booboo turned an 8-mile hike out into a 15-mile grinder. The wife is not happy! If I take the scouts here, I will not make that same mistake since I would hate to have all those scout moms upset with me.