Last week I told you risk for the markets was off the charts. Last week Google is down 1.5%, FB down marginally, Amazon down 2%, AAPL up marginally and NFLX down 5%. Biotech is down 2.9% as is housing. These are not big numbers, but when you look at some of these charts we are starting to see technical damage for the first time in a long time.
Crude oil prices must find new balance as global oil stock piles are falling against surging global demand and an increasing amount of geopolitical risk. Russia and Venezuela are the hot issues, with Iran and North Korea lurking in the background.
OPEC and non-OPEC leaders are wrapping up their meeting in St. Petersburg Russia and it looks like it has yielded some positive results. Not only did Nigeria agree to cap their oil production output at 1.8 million barrels a day, the Saudi Oil Minister Khalid al Falih, speaking after the meeting broke up, seemed optimistic that the path they were on would eventually get global supply back in balance.
For oil and the markets, Russia is all the rage. There is the big OPEC/non-OPEC pow-wow in Russia and reports that Special Prosecutor Robert Mueller is opening an investigation into President Donald Trump's business transactions with Russia one day after the President said that that would be a red-line for him.
As we enter the business end of the week, the United States will be in focus with a large number of data scheduled to be released including some important labor market numbers and surveys on the services sector.
Crude oil prices sold off almost 5% on what many people attributed to a story that some unnamed Russian oil company source said that Russia was against a production cut. Today those sources are still unknown, but really the sell-off in oil probably had more to do with the fact that Saudi Arabia cut prices to Asia as the kingdom was losing market share to Iraq and Iran that has been raising output and taking away business from the Saudis.
Crude oil prices are under pressure after an unconfirmed report was released that Russia would oppose and additional output cut and instead would stay the course on current cuts. Yet, an unsourced story from Bloomberg was enough to break oil that had been on a streak of eight up days in a row, one of the best runs in oil in seven years.