Oil's Big Friday ComebackMarkets were essentially flat on slightly higher than average volume in trading today. The Dow dropped by 11.76 points and closed out the trading day at 16,643.01. The S&P 500 grew slightly, adding 1.21 points today, and closed at 1,988.87. The NASDAQ led the day in gains, growing by 15.62 points to close at 4,828.33.
In overseas trading, markets were mixed today. Japan surged today, and posted a gain of over 3%. London also had an up day, posting real gains of just under 1% and 90 points. Markets in Hong Kong declined today, falling 226.47 points.
Oil Stages A RecoveryThe price of oil staged a comeback today, climbing over 20% in just two days. It closed out the day today a $45.33 per share. The problem with the rise in oil is that there is little to no reason for it. There is still a massive supply glut, and OPEC still refuses to cut supply, while America is also standing strong and refusing to cut their supply as well. In the meantime, demand worldwide is falling because of financial turmoil.
Whether or not oil holds on to this latest rise, the fundamental problems remain. One of the largest is falling demand. The reason that demand is down worldwide is because of financial problems overseas. Europe, especially, has been struggling lately with problems of demand. People just don't have the disposable income to drive everywhere, and oil is suffering because of it.
Today, the price of crude oil broke a 10-week losing streak. Oil was at the lowest levels in over 6 years, but today's rally brings the price of crude back up to more recent levels. There have been mutterings lately of Saudi Arabia softening on production in order to let oil strengthen and raise extra money to fight the global conflict in Yemen. Whether or not that's true, and if the price of oil is going to hold at $45, is so far yet to be seen.
Bottom Falls Out of Gamestop (GME)After a strong rise and and surprising resiliency during the latest downturn, the bottom finally fell out of Gamestop (GME) today. While the company's shares were trading as high as $47.75 per share earlier in the month, after a downgrade Gamestop fell more than 8%. In trading today, Gamestop fell by 3.71 points and closed out the day at $42.49 per share.
Published on Aug 28, 2015By Aaron Phillips