The U.S. stock market decided to interrupt the two-day series of negative closes. Major stock benchmarks ended the trading session on a positive note. Dow Jones gained 1.33% due to a strong demand for Boeing (BA) +7.54% and Salesforce (CRM) +7%. The S&P 500 and Nasdaq broad market index were higher by 1.84% and 2.69%, respectively.
Among the major majors, Nvidia (NVDA) +6.94%, Amazon (AMZN) +3.15%, Alphabet (GOOGL) +3.28% and Tesla (TSLA) +4.68% were bullish. That was enough to put the weekly interval (so far) in the green by 0.1% on DJI, and by one and a half percent on the composite Nasdaq.
The start of the trading session was “overshadowed” not only by hawkish comments from Lail Brainard, but also by a warning from industry giant Microsoft (MSFT) about a potential drop in operating results on earnings and revenue for the current quarter. Bearish passions boiled over in the industry giant’s stock at the start of the trading day, but Bill Gates’ stock eventually closed on the upside by 0.79%.
Oil producers failed to support the Dow Jones
Shares of oil companies, which saved investors’ portfolios in more than one situation, sharply showed weakness as soon as the broad market turned its eyes to the technologists. The “big three” ExxonMobil (XOM), Chevron (CVX) and ConocoPhillips (COP) lost 0.17% to 0.68%. The declines in the less-capitalized sector were even more pronounced. Occidental Petroleum shares, for example, were down 1.59%.
A trader on the NYSE watches the Dow Jones Index rise.
Still, I still see this sector as a potential investment winner this year. There was no market-comparable correction in these stocks in early 2022, and there won’t be one now. But there may be an opportunity to enter these securities additionally. The oil market is in a unique situation.
To be or not to be: $150 per barrel
. Quite recently, the U.S. administration put actual pressure on OPEC+ members in order to squeeze an increase in production from the cartel. It even got as far as unpleasant diplomatic excesses in the Middle East. The “loss of face” proposals to Iran and Venezuela are a ridiculous song.
And what was the result? What was the result of the policy of economic pressure on Russia? Now the cartel proudly declares that it is ready to increase production as it is asked. The subtle point is that production would increase not by 648 thousand barrels per day, as many people write, but instead of the current increase of 432 thousand. And not now, but only starting next month.
Not surprisingly, against this backdrop, oil continued to rise. West Texas Intermediate (WTI) has surpassed the $117 price tag today, while North Sea Brent futures are trading under $118. This is unlikely to be the price limit, which was reported yesterday by Jamie Dimon, head of the largest U.S. bank JPMorgan, who admitted the growth of quotations of black gold to $175.
The biggest buyers are alive and well
. China and India can confirm the rightness of the American banker. Beijing and New Delhi are sweeping away all possible volumes not only on the background of a huge discount on Russian oil, but also on the smell of a potential grand slam in the global economy. This is exactly what the U.S. and its partners are “preparing” us for, who have just finished forming the sixth package of the autodaphe.
You don’t have to be an analyst to see that despite the next stunning items on the sanctions list, the forces of the collective West are running out. For example, the clause about the ban on insurance of sea vessels with Russian oil. It’s kind of spot on. After all, Russia has successfully leveled supplies in this very way. But!
The West is running out of “gasoline” to put pressure on Russia
Every such document has a notion of “coming into force”. From the day it is published, signed, etc. And in this case we’re talking about “in six months.” That’s how they do it. That’s why many people compare the current European policy to mice that cried and cried, but kept eating cactus. The West has already faced skyrocketing fuel prices and record inflation in recent decades; food prices are on the rise, but the policy of self-inflicted injuries continues.
After all, nothing has happened to us. Despite the decline in the physical volume of energy exports, the Russian Federation’s monetary revenue grew at the expense of abnormal price increases. That’s why we can’t be weeded out. We can go on like this, but they can’t!
The fact is that high oil and natural gas prices in the West are paid for by the consumer, and the consumer is already extremely dissatisfied. And what will happen with a possible increase in the price of energy carriers can be predicted, but we will not, because it can cause a soul injury to the delicate European soul.
