Friday, November 28, 2014

Active four hour equity market

Weren't people supposed to be sleeping off their Thanksgiving merriment or instead heading to the gym to work it off.  OPEC's decision to let the oil supply glut ride and not cut production apparently made those choices impossible for some.  Volumes in most energy related stocks easily exceeded average full day levels.

One could ask if OPEC needs a market analyst, or someone like an investors relations consultant who advises firms on the expected equity investor's reactions to major announcements.  The market reacted.  If Mr. Market could talk he said "if you Saudi Arabia don't cut production, we will pay you much much less for your oil".  This does not seem to be a financial positive for OPEC or big oil players.  Big oil company stocks were down significantly and in most cases oil service stocks were down by even more.  Big rail companies that deliver the oil were down significantly and in most cases rail supplier stocks were down radically more.  There was absolute carnage out there today but it was so far confined to one major market sector.

Of course, there were big winners such as the airline industry and its multiple suppliers as well as some major retail stores where investors began salivating, even after yesterday, as they dreamed not of more cornbread stuffing with gravy but of more ringing cash registers and online flows surging.  What would normally have been a quiet day was not.

Apart from the energy market move today, the overall equity market is close to its highest in a year.  Fidelity's Extended Market Index Fund, Total Market Index Fund, and S&P Index Fund are each at 52 week highs.  In addition to that the Fidelity Intermediate Bond Fund and Total U.S. Bond Index Fund are both in the top quartiles of their 52 week performance.  In a word, things are peachy all around, for now.  Still, seeing one critical sector of the global economy move into almost chaos today is something to watch closely.

Back to the couch.    

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