Markets Start the Week Strong
PUBLISHED ON: Aug 17, 2015
In trading today, all three major indices were up on lower than average volume. Despite the slow day, the Dow managed to add 67.78 points to close at 17,545.18. The NASDAQ was up 43.46 and lead the pack with 0.86% in real gains. It closed at 5,091.70. The S&P 500 gained 10.90 points and closed out the trading day at 2,102.44. In overseas trading, Asia was mixed. The Chinese markets in Hong Kong were down, but Japan recovered and posted a gain of 101 points.
Downward Trend for Crude Oil ContinuesThe downward pressure on crude oil continued today, bringing the losses up to 17% for the trailing month.
All of the pieces are in place for a larger drop. The deal with Iran is looming, and even if the US votes no on the proposed deal it's almost certain that the rest of the world will ease sanctions. That would flood the market with Iranian oil, which will start off undervalued as the infrastructure in that country is brought up to date.
Also, the US and OPEC are continuing their big push toward increased production. That's going to mean that prices in general continue to fall, as they are both large producers. The situation in Russia is more fluid, but they are also sitting on massive reserves of oil and need to do something in order to keep the ruble strong -- and that could mean a bigger investment in producing oil.
All of which point to lower prices -- possibly as low as $25 per barrel -- by the winter.
Despite the decline in oil, pipeline layer Williams Companies (WMB) has been trending upward. Today the trend spiked when news of a buyout bid from Spectra Energy (SE) went public. Both companies build and manage oil and gas pipelines. Williams has put itself on the auction block after a failed all-stock buyout bid from Energy Transfer Equity (ETE) in June.
In trading today, Williams Companies (WMB) was up 5.11%. It gained 2.67 points and closed the day at $54.90 per share. Spectra Energy (SE) was down half a percentage point, or 0.15 points, to close the day at $29.95 per share.