OIL COLLAPSE PUMMELING THE MARKETS
U.S. stocks suffered broad losses on Tuesday … extending a dismal start to the new year.
The Dow Jones Industrial Average closed at 16,153.53 – down nearly 296 points (or 1.8 percent of its volume). Meanwhile the Nasdaq closed at 4,516.95 – a drop of 103.42 points (or 2.24 percent of its volume). Finally the S&P 500 shed 36.35 points to close at 1903.03 – a 1.87 percent sell-off.
By comparison, all three indices posted record highs in 2015 – with the Dow hitting 18,312.39 last May, the Nasdaq hitting 5,218.86 last July and the S&P peaking at 2,130.82 last May.
What’s driving this collapse? Plunging oil prices.
A barrel of West Texas Intermediate crude dipped 5.5 percent to $29.88 – while the global benchmark Brent fell 4.4 percent to settle at $32.72 a barrel. By comparison, West Texas Intermediate crude stood at $147.27 per barrel back in July 2008 – while Brent hit its all-time high of 145.61 that same month.
Obviously low oil prices have resulted in savings at the pump … although as we predicted consumers aren’t pumping that money into the consumer economy, they are spending it on Obamacare. In fact, new health care spending was the primary driver of last quarter’s anemic 0.69 percent “growth.”