Your Weekly Market Blip 11/30/18

Your Weekly Market Blip 11/30/18

Friday’s trading ended with a 199-point gain for the Dow which closed at 25,538. Trading volume was low. The Dow opened the day in the red during amateur hour but then during happy hour (which is the last hour of trading each day) buyers came off the sidelines and got into the game. For the week, the Dow gained about 1,250 points or roughly 5%. For the month of November, the Dow gained about 1.7% bouncing back from a rough October and for the year is up about 2.6%. Microsoft surpassed Apple and most valuable company in the world thanks to Apple shares falling on fears of a slowdown in iPhone sales.

Tesla appears to be getting it together and it was reported today that the company is now producing 1,000 model 3s per day. Shares of Tesla have been holding up well and even over at the Giga Factory near Reno, word is that the company just finished hiring a third wave of engineers and now seems to have a full complement of smart people who are working with increasing efficiency.

The price of a barrel of oil fell 22% during the month of November and getting pounded like a rented mule. WTI crude today finished just above $50 per barrel. Supply and demand dynamics within the oil patch reveal strong US production and rising stockpiles along with forecasts that are saying global demand growth will slow. This, coupled with oil sanctions on Iran being extended for 6 months pushed prices lower. During the G20 meeting Saudi Arabia, Russia and the US will discuss oil production. China is now taking delivery of oil from Venezuela in leu of interest payments on defaulted debt. Apparently, Russia is not happy with this arrangement.

With the G20 meeting in full swing, all eyes are on President Trump’s meeting with President Xi of China to talk trade. Markets appear hopeful that progress can be made. China is having to grapple with a slowing growth rate and problems with rising debt defaults on its BRI (Belt & Road Initiative) program where they lent approx. $1.3 Trillion to roughly 76 different countries for infrastructure projects. Some gurus are calling this the “BRI Bubble” and if the dire predictions come true it could contribute to slowing global growth which even now might be partly responsible for falling prices of oil, copper, aluminum and other materials. Stay tuned.

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