Upset Stock Market
The stock market has almost been in a free fall in the past week. It is kind of like it doesn't like the improving real estate sales and upbeat retail sales and related Consumer Confidence. Normally these factors will push the market higher as all indicate the economy is on the upswing.
Unfortunately, the great fuel prices we are enjoying has investors skiddish about the global economy. It makes no sense to the rational investor: high supplies with slight lower demand(due to increase energy efficiency or alternative fuels??) will always depress the price of anything.
The U.S. is pumping more oil than it ever did. OPEC and other suppliers like Russia are finding that the flush of oil in the market is depressing prices and their economy. Yet rather than tap the supply as has happened in other periods, OPEC and others are continuing to pump oil, hoping to outlast the low prices and not lose market share.
It is almost like every one is waiting for someone to blink!!! It will happen and someone will cut off the supply so prices recover! Oh and then there is the concern that the Fed will raise interest rates.
We will yell when the price pops to $3.65 a gallon again. But we really shouldn't. We should simply enjoy the low prices at the pump and know the economy is going on fine.
And as Jim Belote notes in his newsletter, interest rates stay near historical lows on mortgages. Thus, no time like the present to
make a move!! One never knows with these economy fluctuation if the rates will not get caught up in the "hysteria" and take a bounce up.