Your Tuesday Market Blip 1/12/16

Your Tuesday Market Blip 1/12/16

Stocks rallied today for the first time this year. The Dow opened higher then went red before a late rally pushed the index to a gain of 117 points at 16,516. Trading volume was on the higher end. Tonight will be the final “State of the Onion” speech by President Obama. It will be interesting to listen to his parting comments in light of all the global stress.
Alcoa Aluminum kicked off the 4th quarter earnings season positing a decline in sales of 18% and a decline in earnings of 88%. The results were disappointing but did manage to beat estimates. The company forecast strength in demand for global auto sales and aerospace but said weakness in base mining and smelting due to weak pricing and the slowdown in China and the EM caused the revenue drop and will most likely be a source of pain for the year ahead.
The CEO of Continental Resources, Harold “Honey Baked” Hamm, was interviewed on CNBC and stated that oil prices could range between $40 and $50 per barrel by the end of the year. He cited stress in the country of Saudi Arabia which is now running huge deficits, issuing bonds and announcing it was offering part ownership of its big oil company in a stock offering as evidence. Harold noted that in the US, oil companies cut capex and survive but that in Saudi Arabia the oil is not just an industry segment rather it funds the whole country so the stakes are much higher. It will be interesting to see if Mr. Hamn’s predictions bear out. WTI crude closed the day lower trading just over $30 per barrel. More firms are lining up to forecast oil prices in the $20’s near term. WTI crude today finished off about 2.5% to $30.50 per barrel.