The Gas Price Fluctuations of the U.S. as a Probe of Taxes, Pundits, and Election Results
The International Energy Agency has reported that the total net income for the world oil and gas producers will double this year from last year, as the five biggest oil companies generated more than $50 billion in profits in the second quarter. The agency said that high fossil fuel prices had generated an unprecedented windfall for producers.
They are widely expected to use their mega-profits to reward their shareholders with dividends. Chevron announced last week that it plans to buy $75 billion worth of its own shares, and hike its quarterly dividend.
Mr. Biden was sensitive to gas prices and felt they had an influence on the public mood. As the price at the pump hit record highs over the summer, the president’s approval rating slid to new lows but his own numbers improved as gas costs came down. Likewise, according to polls, the rise and fall of gas prices is directly inverse to public feelings about whether the country is heading down the right or wrong track.
Ron Klain, the White House chief of staff, is so attentive to the fluctuations that he checks the average price every day and often posts messages on Twitter pointing out when it dips further.
If you are filling up your tank this weekend, you will find it to be one of the cheapest Saturdays of the year. He mentioned on Monday morning that gas prices are dropping nationally.
The Wall Street Darlings of 2022: What’s Wrong with Wall Street? The Case of Wall Street, Inc., Facebook, and MRNA
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Verbose writers afflicted with the tendency to deliver copy well above their requested word count are often advised by editors to kill their darlings – to throw out large swaths of stories that they’re particularly fond of.
According to a report, Wall Street has also embraced the concept. The S&P 500 is down 20% in 2022.but the biggest shock is the downfall of companies who have dominated markets for years.
Investors are rushing to kill their darlings – er, sell their stocks– and even safe-havens like Apple
(AAPL) and Intel
(INTC) are getting crushed in the stampede.
What’s happening: It’s been a shaky year full of economic uncertainty, geopolitical chaos, elevated inflation and a hawkish Fed. The only thing driving stocks up is the energy sector, which is up over 600% for the year-to-date.
But what’s been most surprising is that market-cap titans, traditionally expected to weather storms on Wall Street well, haven’t held up against the rising macroeconomic tides.
The third-worst performer this year is the auto tech company, which is down 70% by the time you read this. The parent company of Facebook made an appearance in the bottom 10 stocks.
Other recent darlings have been sent sputtering this year – Moderna
(MRNA) was one of the top performing stocks of 2021 thanks in large part to its covid vaccine, and now it’s amongst the worst, down 24% this year.
The Turn of the Screw: Premarket Stocks Tradedown in the 2022 Reddest Season for Retailers, Meat and Chemicals
Even Walmart
(WMT), the big-box chain known for weathering many economic storms, is in the red this year, down just under 2%.
Surprising to the upside: There have been some companies that have been able to keep chugging along in 2022. Consumer products have had their best performance to the S&P 500 since 2008. Coca-Cola shares have risen by 8% so far this year. Snack food company Mondelez
(MDLZ) is also up 1.5%.
IBM
(IBM), meanwhile, has managed to grow in a year when the entire tech sector is faltering – the company is up nearly 4%. The company is “trading well above its historical range,” wrote Bernstein Research analysts in a recent note. But “given its defensive characteristics and historical performance, we believe that IBM
(IBM) is likely to fare well if we continue to have pressured markets, and likely to lag major indices if we enter a recovery period,” they said.
Bank of America CEO Brian Moynihan told CNN last month that the continued strength of the US consumer was nearly single-handedly staving off recession. In the last couple of months of the year, retail sales can account for 20% of total sales, according to the National Retail Federation.
But while American bank accounts are still fairly robust, they’re beginning to dwindle. In the third quarter of 2022, credit card balances increased. The New York Fed has kept track of the data since 2004.
The economists said consumers would rein in their spending further in the months to come. In the final months of the year, we think consumers should spend a bit more, but we don’t think they’ll spend a lot in the years to come.
And with interest rates poised to go higher in 2023 and economic uncertainty sure to grow, consumers could be starting to run dry at the worst time, reports my colleague Alicia Wallace.
Source: https://www.cnn.com/2022/12/30/investing/premarket-stocks-trading/index.html
What have you learned from the last few years of the big bang? Reflecting on what you’ve been through in the last five years, and how you are going to keep doing what you love
2022 has been a wild ride, and I’m so grateful that you joined me for it. I hope the movie Before the Bell helped you to understand the bad and the good in the economy.
So as you count down to the New Year, please take a moment to congratulate yourself – you survived this year. Regardless of where your portfolio is in, you should take a break and reflect on what has been happening to you.
The index was close to it’s lowest level in nearly a year. The tech-heavy index is down more than 30% this year.
Russia’s invasion of Ukraine, snarled supply chains and another year of Covid turned markets on their head this year. Central banks hiked their rates at a historic pace to keep price hikes from getting out of control. China shut down entire cities several times in order to ward off the swine flu. Demand for energy fell in the second half of the year even though supplies were cut off. Intense storms and climate change upended markets, too.
While stocks were terrible, bonds were even worse. Bond investors were left unattractive by inflation, rate hikes and a strong dollar.
Inflation, which briefly rose above 9% in the United States — a 40-year high — hurt economic growth, even as consumers continued to spend. It mostly hurt corporate profits.
Earnings for the S&P 500 are expected to grow only 5.1% this year, lower than Wall Street’s average annual increase of 8.5% over the past 10 years.
Energy, which boomed as oil and gas prices surged earlier this year, made up the entirety of Wall Street’s profit gains. S&P 500 earnings would have fallen, even without energy, Butters predicted.
The worst performing stock in the S&P 500 this year is a company called Generac. Coming in second is dating app company Match Group, down 70%.
Growth stocks, shares of companies that are expanding quickly, were particularly hard hit. Expectations for future profits are the main reason investors value these firms. Those look less enticing in a world in which interest rates are going up.
That’s a huge shake-up: At the start of this year, Tesla was the fifth-most valuable company in the S&P 500 and Meta was sixth. Tesla is now the 11th most-valuable firm in the index and Meta is in 19th place.
The S&P 500 has gained about 120% this year, as shown by the biggest gainer in the index: Occidental Petroleum. Constellation Energy is in second place, up about 110%, and Hess comes in third with a gain of around 95%.
Oil Prices and Energy Stocks: Insights from Wall Street, Wall Street News, and the Real Oil and Gas Markets of 2022
The downfall of cryptocurrencies as the sheen came off the markets has been one of the biggest stories. The run-up to record highs in 2021 was met with an epic collapse by investors. The implosion of parts of the industry once viewed as relatively stable, such as Sam Bankman-Fried’s FTX exchange, sent traders running for cover.
Wall Street analysts say that Big Oil has passed its peak, but the ride down will be slow — these companies will still bring in remarkably large profits for a while.
What’s happening: The story of 2022 (and 2021 to a lesser extent) was energy. Brutally high oil and gas prices were the talk of the town and one of the largest contributing factors to sky-high inflation. That was bad news for drivers, but good news for the energy industry as oil prices and energy stocks are closely interrelated.
HSBC Global Research analysts wrote in a note, “Although23 should remain a solid year for the integrated oils, there is less headroom than we imagined just a few months ago given the correction in oil prices and halving in European gas prices.”
“In our view, upcoming earnings for the US oils will be one of the most consequential in several years,” wrote Doug Leggate, a Bank of America research analyst, in a recent note. “It is now clear that the best quarter for many US oils has passed.”
Stock prices may stay elevated for a while. Stewart Glickman, deputy research director at CFRA, said in a recent note that he thinks the use of cash would probably be the safety valve if fundamentals began to get worse.
What’s next: One key risk to the energy sector is the possibility of a steep recession which could cause “oil demand to careen into a ditch,” wrote Glickman. He said that there had been previous instances of demand falling through the floor and prices being taken with it.
Exxon reports today, Shell reports Thursday and BP and TotalEnergies report the following week. Analysts think that misses and negative guidance are on the way.
The communications sector, with its many hard-hit tech and media companies, was the worst-performing market group last year, plummeting a whopping 40% in 2022. Everything is not the same because time changes everything. It’s currently the best performing sector so far in 2023 and has surged nearly 10%, according to data from S&P Global Market Intelligence.
Warner Bros. Discovery, the parent company of CNN, plunged nearly 60% last year and is currently the best performer in the S&P 500.
Several other media companies are having a resurgence this month. CBS had soared by a third. Disney is up 25%. The internet giant has gained more than 20%. It was the death of streaming media. Meta Platforms’ shares are up more than 20%.
After tumbling last year, consumer discretionary stocks have enjoyed a stunning rebound. The sector lost about 38% of its value in the past year.
Investors seem to be buying into hopes the Fed will continue pulling back on the size of its rate hikes and possibly even pause later this year. Increasingly, the sentiment is that the economy could wind up heading for a so-called soft landing: a slowdown but not a full-blown recession.
Those hopes have boosted other consumer stocks. Amazon
(AMZN) is up about 20% this year. Cruise line owners Carnival, Royal Caribbea
(RCL)n and Norwegian
(NCLH) are among the top performers in the S&P 500. Las Vegas Sands, MGM, and Wynn are casino companies.
Source: https://www.cnn.com/2023/01/31/investing/premarket-stocks-trading/index.html
A CNN Analysis of the U.S. Trade Warfare and Emerging Security Threats against TikTok and ByteDance
A committee spokeswoman confirmed to CNN that the CEO of TikTok will testify.
The hearing underscores the political risk for TikTok as it negotiates with the US government on a national security deal.
US officials have raised concerns that China could use its laws to pressure TikTok or its parent, ByteDance, to hand over US user data that could be used for intelligence or disinformation purposes. Those concerns have prompted the US government to ban TikTok from official devices, and more than half of US states have taken similar measures, according to a CNN analysis.
The company earned adjusted income of $14 billion in the quarter, down from the record $18.7 billion it earned in the third quarter, but it was up from $8.8 billion in the fourth quarter of 2021. That was better than the forecast from analysts.
The company was helped by soaring oil prices following Russia’s invasion of Ukraine nearly a year ago. Oil prices peaked in June, but have been falling ever since.
CEO Darren Woods defended the company’s investments in production, saying the company’s North American refineries had their greatest output ever, and that it had its highest global refinery production since 2012.
Woods said that their results benefited from a favorable market. We began our work before the Pandemic because we wanted to take advantage of the undersupplied market. We leaned in when others leaned out, bucking conventional wisdom. We continued with these investments through the pandemic and into today.”
An Operating Year of $29.8 billion to the Company and $22.9 billion to its Shares, Debt, and Dividends: Premarket Trading Results for ExxonMobil
Still, the company returned $29.8 billion to shareholders during the year, with about half of it coming through dividends and half through share repurchases.
That compares to $22.4 billion in spending on exploration and other capital spending. It also reported a $22.8 billion, or 336%, increase in cash on hand, ending the year with $29.6 billion in cash on its balance sheet. And it repaid $7 billion in debt.
The full-year results come to an average of $1,874 of profit for every second during the course of the year. The time it takes to fill a tank of a full-size SUV or pickup is about two minutes, and ExxonMobil earned $225,000 on average.
ExxonMobil shares were slightly lower in premarket trading after the report as investors were disappointed that there was no new program to buy back shares. After the open, shares were slightly higher.