Nasdaq Cracks 5,000; Oil at 6 1/2-year Low

Remember a few years ago when oil went to $150 per barrel? Strange that we were running out of oil then, but now, several years later, there seems to be so much oil that there is nowhere to store it. Oil stockpiles added 2.6 million barrels, pushing oil prices to fresh lows just above $40 per barrel this morning. Stocks, reacting to oil, Fed minutes, and losses in Asian and European markets, also sold-off hard, with the Dow losing 225 early in today’s session. The Nasdaq has fallen below the 5,000 mark, while the S&P 500 has broken through 2,100 on the downside. The Fed minutes released today should provide a bit more clarity regarding pending Fed rate hike action, although we will not know for sure until September’s meeting, if the Fed will begin raising rates. My best guess is that the Fed will kick-off the rate raising cycle in September with a quarter-point hike – not a big deal, but with powerful implications that the rate raising cycle will have commenced, and that rates will be heading higher for years to come. That impending headwind should give investors pause, and could and should drive a sizable correction in stocks.


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