Worried investors send stocks sharply lower as crude tops $55 US per barrel

Yahoo ^ | Oct. 22, 2004 | MALCOLM MORRISON

[expat_panama]

News Home - Help

---

 

Worried investors send stocks sharply lower as crude tops $55 US per barrel

MALCOLM MORRISON

TORONTO (CP) - Crude oil that rose well past the $55 US a barrel level pressured stock markets Friday as investors also dealt with a string of tepid earnings reports.

The price of crude oil for December delivery on the New York Mercantile Exchange moved up 98 cents to a fresh high of $55.45 US a barrel on supply concerns - particularly heating oil inventories amid forecasts of a colder than usual winter in the U.S. Northeast.

Investors also found fault with many of the latest batch of earnings reports from the United States.

"We've been essentially range-bound," said Patricia Croft, chief economist and vice-president at Phillips, Hager and North.

"We get to the top of the range and people get a little bit frightened and then on we go but the uncertainties that were with us at the start of the year haven't really been resolved in terms of oil and economic outlook and the Fed and politics and those issues have still plagued the markets."

[Lord Nelson]

Well, I guess it's possible. You are correct, that the market could cost Bush the election. If the S&P dips under 1000, I think Bush is finished.

[TruthShallSetYouFree]

Bin Laden worries?

Of course he worries. You'd worry too if you were living in a tiny cave and your dialysis machine was hooked up to the battery of a '56 Chevy.

[sinkspur]

You are correct, that the market could cost Bush the election. If the S&P dips under 1000, I think Bush is finished.

Wanna bet?

[Cobra64]

Time to start drilling in ANWR if we are going to turn this thing around. We're in a time of war. President Bush needs to declare, based on our state of war, we are going to start drilling. Most of the people will agree with and back him.

Should have done this 10 years ago. It takes about 7 years to bring refined fuel to the market. Everyone thinks el-presto-zappo, ya just turn on the spiggot and fill up the car. Doesn't work that way.

[expat_panama]

Will the DJI30 crack 9000 before the election?

Absolutely!   The neural net computer at  http://www.stock100.com/ has proven that it will, but then it's going to dip again. It's so nice to have info on future stock prices.

[Doctor Stochastic]

Probably based on the lower lows followed by lower highs theory.

Maybe Kerry has a secret plan to fix things.

[sitewriter]

You have to start sometime. Think what it may be like in 7 years if we don't start now?

[steve86]

Worried investors send stocks sharply lower as crude tops $55 US per barrel

Why did $51, $52, $53, and $54 not have about the same effect?

I agree, it's definately a Soros move.

Well-funded manipulators can start or stop a big move, via well-timed futures transactions, but no one can afford to fund a sustained move (with the possible exception of the US Treasury).

The fact is, the four-year market cycle is starting to roll over, and the 18 month cyclical bull market is coming to an end. That's just the way it is, and there is no good answer to the question "why?".

[hawkaw]

I think this is the Dems Oct Surprise, re: Soros..

Send the Oil up, Crash the markets right before election..

Is there any proof to this? Liek I keep seeing this type of talk all over FR but no one has provided any proof that it is true.

Does anybody have some good evidence on this?

[Lord Nelson]

Bet on what? That the S&P will be under 1000 before Nov 2? Or that being under 1000, Bush will lose?

[shrinkermd]

There are always some stocks up and some down regardless of the general trend of the stock market. IMHO we are in a secular bear market and have been so since 1998 or thereabouts.

The nature of this bear market was obscured by the enormous increase in credit and money supply just prior to y2k. These dollars seemed to go into the then hot Internet stocks until 2000. Then we had a crash of monumental proportions in the alleged "bubble." This resulted in a sharp, 6 trillion dollar loss in the stock market.

Greenspan et al then pumped up the money supply and pushed short term interest rates into almost all time low levels. With the Bush Tax Cut and huge increases in the equity of homeowners due to the low interest and mortgage rates, the bear market has been further obscured.

But the kicker in all of this is that the depreciation of the dollar (inflation) has added to this hidden bear market until recently when it began to drop in earnest.

Presently, there are many short term challenges for investors, but IMHO anticipate another five or more years of general stock market decline when one corrects for inflation. A good way to measure this decline is the gold/DJ ratio; however, right now this post is too long.

[Lord Nelson]

I agree with you. Even the biggest money can rarely make a market go in the opposite direction. Soros was public enemy # 1 for tanking the Malaysian currency. But he couldn’t have done so, if the small Asian economies weren’t over-valued to begin with. He saw that what was seen as capitalism was really only crony-ism in places like Malaysia, Thailand, ect … The currencies were bound to collapse. He just helped them along. This caused the PM of Malaysia to spew anti-American and anti-Jewish hatred. Which he continues to do. His right hand man criticized the PM for alienating the US and closing off their currency from the floating currency markets. That right hand man was accused of homosexuality and the kangaroo court of Malaysia (the same kind of court that caned the American years back) put him in prison. Sorry, I just can’t remember or spell their names at the moment.

The point is that you’d think a man branded an enemy of Islam would side with those who would protect him from the beast?

My real point though is that there are real fundamental reasons for oil to be priced this high. Whether its too high by $10 or so will eventually be worked out in the markets. Not all is well in Saudi Arabia, the largest oil reserves in the world.

When you were talking about the bull coming to an end, are you talking about oil or the markets?

[sinkspur]

Both.

[mewzilla]

Bush is finished? Say what? You think folks who are po'ed at the price of oil are gonna turn around and vote for a guy who was AGAINST the first Gulf War. AGAINST drilling in ANWAR. Is FOR raising federal gas taxes? LOL. I don't think so :)

[Lord Nelson]

I’m probably one of the few that would agree with you. The 2000 crash didn’t do enough to work out excesses in the valuations. We certaintly can’t blame Bush for the bubble or its consequences. Unfortunately the public is not well educated and it blames the current administration for its woes. And wrongly believe the stock market IS the economy.

The theory is that as the dollar weakens the US will experience inflation as foreign goods will no longer be competitive. Has anyone seen the effects of that yet, or is it too soon?

[biblewonk]

Oh boy is this great!

[biblewonk]

There are lots of positives about high oil prices. It shows our rediculous dependence, it shows the two facedness of liberals as they are in bed with blue collar car makers and earth firsters. The winner, the one with the most money, the car makers. I suspect that most SUV owners could car less about 2 dollar a gallon gas. Maybe at 4 bucks you could get their attention.

[steve86]

When you were talking about the bull coming to an end, are you talking about oil or the markets?

I was talking about the stock market. Having never looked at cycles in the petro markets, not sure what form they take. I agree that even if all speculation was taken out of the oil market there are still fundamental reasons for the price to be high.

[Lord Nelson]

I think those who want Bush to win are going to fight in the futures markets tooth and nail to keep the S&P from collapsing. I think they have a decent chance. I wouldn’t bet against them. So I’d say there is a 75% probability that the markets don’t break down.

As far as the markets causing Bush the election, I’d say a combination of the S&P under 1000, the Nasdaq under 1900, and the DOW in the 9000s will cost Bush the election. 100%. I could be totally wrong and will have to eat my words. For America’s sake I hope it doesn’t happen.

After the election. If it comes down to a few hundred votes, and ends up in the courts, the markets will lose big time. If Kerry wins, the markets will lose. They don’t want a man who will not defend America. If Bush wins, the markets will win short and medium term. Long term, they are not in his control.

[Lord Nelson]

Actually I wasn’t arguing high oil prices will kill Bush’s re-election. But just that “it’s the economy stupid” (not my words). If oil prices cause the markets to tank prior to Nov 2, the average not so wise voter will blame Bush and vote for Kerry.

Of course Kerry is a dumb vote. He, like Gore, would tap into the war reserves on a whim. Not only that, instead of opening up ANWAR and other reserves, would tell everyone to buy Hybrids.