Your Weekly Market Blip 1/15/16

Your Weekly Market Blip 1/15/16

Markets closed the week looking like 10 miles of bad road as plunging China stocks, sliding oil prices and a disappointing US retail sales report whacked investors. Today was also an options expiration day which boosted volume however the volume boost was not all that much which I found interesting. At the close the Dow lost 390 points at 15,988. For the week the Dow lost about 2% and for the month so far it is off 8.2%.
Oil prices fell to new lows again today after yesterday’s rally. The issue with oil is that pricing seems to be out of our control (if it ever was) and this is affecting US markets via an oil patch recession, albeit consumers are winning at the pump. Saudi Arabia and Iran are pumping excess oil for reasons that are no longer rational from an economic standpoint. To them it’s personal and they seem to be trying to drown each other in a sea of crude as tensions from the sunni/shia, Arab/Persian divides are on the rise. As long as this condition persists we can expect volatility in US markets exasperated by weakness in China. At the close WTI crude today closed off 4.9% at $29.66. Gold meanwhile was up $14 an ounce to trade near $1,088 per ounce.
While the markets are pulling back some are stepping up and taking advantage of the situation. It is being reported that over the past 7 days, Big Kahuna Warren Buffett has bought over 6 million shares of oil refiner Philips 66. The stock had been near $92 a barrel but since the start of the year has fallen to the mid $70s. . What Buffett maybe knows is that should any of the big OPEC oil producers suddenly announce production cuts the price of crude could take off and that is what makes this selloff so unpredictable. It could turn on a dime.
While Amazon had great Christmas sales, Wal-Mart didn’t do so well and today announce it was closing 269 of its 11,554 stores and shutting its Express format in order to focus on growing the online end of the business.
Have a great weekend and remember that Monday will be a holiday in celebration of the late great Dr. Martin Luther King.