"You know what the news is-- in a minute, you're going to hear the rest of the story"- Paul Harvey
Think outside of the box with me for a moment. Prior to the last Presidential election, and the two previous mid-term elections, oil prices magically decline a few months before.
I could care less what the media says, you have to keep in mind that the US media is not the only news source in the world. Unfortunately, the public’s opinion is formed and swayed by what is reported on TV. If I didn't know better, I would think that’s the way the system was designed.
As an example, was your opinion on stocks, the market, and the economy swayed in 2007 by these media phrases?
- The Goldilocks Economy
- Soft Landing
- The Resilient Consumer
- "Points above new all-time high" on your TV screen.
- Valuation models suggest stocks are too cheap to pass up at these levels.
And this comment by CNBC's Erin Burnett takes the cake- "move over Goldilocks- Economic Nirvana"
Are you getting my drift?
Now extrapolate these opinions on the financial markets into everything else meant to sway your opinion on CNN, Fox, and MSNBC, and tell me what you come up with?
My point in this little exercise is to cross reference everything, and remember what you hear from US news sources didn't come out of the "Burning Bush".
Getting back to the possibility of oil prices falling ahead of the election;
"a senior Iranian oil official said on Saturday he expected the oil price to fall ahead of November's US presidential election, suggesting Washington would seek to push it down for political reasons.- Source Arabian Business
Now most Americans are conditioned to believe that any news that comes from a Middle East source should be immediately ignored or discounted. We have been told the same thing about every other news source who does not agree with the "Establishments" agenda.
Oh, I get it. The Arabs are trustworthy when they throw billions of dollars at our investment banks to prop them up, but they're untrustworthy when they give an opinion.
In the weeks ahead, I am looking for oil prices to decline and commodity prices too.
Today's the market closed slightly higher DJIA (+0.89), and S&P (+0.85), while the NASDAQ (-8.28) closed lower. All eyes were cautiously on Google, but after the bell the company reported earnings of $4.52 per share dispelling rumors that the company may disappoint.
Shortly after the release, Google shares rose over 50 points in afterhour trading.
Stock index futures were trading down in the pre-market after Merrill Lynch (MER, 44.89) reported $6.5 billion in writedowns and announced a 40 percent drop in investment-banking fees. The company also said it will cut about 3,000 jobs.
Speaking of job losses, the initial jobless claims showed an increase in job loss, (+17,000 to 372,000) but since they were in line with expectations, the market chose to ignore it.
In the oil markets, crude oil closed at $114.86 (-0.07) on the day. Don't let the stock market fool you. When oil prices reached $95/bbl the economy came to a grinding halt. When oil went over $95, the economy went into a precipitous decline.
Retail activity is at a standstill, and since the consumer is 70% of GDP, the stock market will be reflectly this decline soon.
Market Sentiment as measured by the VIX Index (20.37) is once again registering optimism. The VIX hit a high of 37.57 on January 22nd, and 35.60 on March 17th. I past bear markets, the VIX reached high's such as 49.35 (Sep 01), 48.46 (Jul 02), so the January high of 37.57 stopped short of a true capatulation phase.
