Talk about a fast turnaround out of nowhere! Crude oil was moving higher today after its big sell off yesterday. This morning's catalyst for the upward move was news that oil stocks had unexpectedly shrunk. It had recaptured half of its losses from yesterday when it began to slowly fade and then fell sharply. The cause was news out of Saudi Arabia.
The Kingdom announced that it was lowering its official selling price for its crude oil. The cut was $1.00/barrel.
Brent crude was hit harder than WTI as the former made a 2 year low in price.
I think it is safe to say that S. Arabia is not exactly thrilled to see US production rising. I for one am particularly happy to see Uncle Sam dethrone it in this area. Think about what might be if we had an energy friendly Administration here in the US!
Bonds continue on a tear higher. The yield on the Ten Year Treasury Note has fallen to near 2.4% today.
I am wondering if some of the weakness being seen in stocks today - and the resultant rush into Treasuries - might be tied partially to investor concerns over the Ebola virus. That slowing PMI number this morning seemed to get the ball really rolling to the downside but we then got news that a second patient is now being tested for possible contamination with Ebola. Some might ( and I am stressing that this is only a guess ) be thinking worst case scenario with an epidemic that would stunt consumer growth. Who knows? But for whatever reason, stocks at this point in the session are not yet seeing any concerted buying. Markets are funny things - they react to news in sometimes unpredictable manners choosing at times to ignore what many deem important and at other times possibly overreacting.
As a personal side note, I do not understand why we do not have a quarantine in place for incoming flights from those regions of West Africa where that virus is raging. Is it more political correctness at the expense of public safety of US citizens?
We can all argue about the proper role of government but one thing that we can probably all agree on is that one of the chief roles, if not THE CHIEF ROLE, of the federal government is protecting the well-being/safety of its citizens. To me, it is inexcusable that we are allowing anyone coming from that area of the world into this country. How many more deadly or crippling diseases are the authorities going to allow into this nation before we get serious about our borders?
There are too many instances of diseases coming into this nation, that we cannot even identify in some cases or that we once had eliminated here to believe that our open borders and lax immigration policies are not the main contributors.
"When misguided public opinion honors what is despicable and despises what is honorable, punishes virtue and rewards vice, encourages what is harmful and discourages what is useful, applauds falsehood and smothers truth under indifference or insult, a nation turns its back on progress and can be restored only by the terrible lessons of catastrophe." … Frederic Bastiat
Evil talks about tolerance only when it’s weak. When it gains the upper hand, its vanity always requires the destruction of the good and the innocent, because the example of good and innocent lives is an ongoing witness against it. So it always has been. So it always will be. And America has no special immunity to becoming an enemy of its own founding beliefs about human freedom, human dignity, the limited power of the state, and the sovereignty of God. – Archbishop Chaput
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