Drill baby, drill pledge sends oil prices down today
Oil slid as U..S President Donald Trump promised to boost U.S. crude production. Brent crude retreated almost 1% to near $80 a barrel.
XOM
Jobs surprise–economy delivers stronger than expected performance in December
In December U.S. economy in December added the most jobs since March and the unemployment rate unexpectedly fell. Nonfarm payrolls increased 256,000, exceeding all but one forecast in a Bloomberg survey of economists. The unemployment rate fell to 4.1%, while average hourly earnings rose 0.3% from November, a Bureau of Labor Statistics report showed Friday. For 2024 as a whole, the economy added 2.2 million jobs—-below the 3 million increase in 2023 but above the 2 million created in 2019. The data almost certainly assured that the Federal Reserve would not cut interest rates at its January 29 meeting. As of 11 a.m. New York time, the yield on the 10-year Treasury had climbed another 5 basis points to 4.74%.
China’s deflation problem got worse in December
China’s consumer price index rose 0.1% in December from a year earlier, in line with the median forecast of economists surveyed by Bloomberg. Factory deflation extended into a 27th month, though the producer price index recorded a slower drop of 2.3%, the National Bureau of Statistics said Thursday. For the full year, consumer prices only inched up 0.2% from 2023, well short of the 1.1% gain economists had predicted at the beginning of 2024.
Fed’s December minutes another nail in the coffin for early interest rate cuts
In minutes from the Federal Reserve’s December 17-18 meeting released on Wednesday, January 8, Federal Reserve officials clearly decided to move more slowly on cutting interest rates in the quarters ahead. “Participants indicated that the committee was at or near the point at which it would be appropriate to slow the pace of policy easing,” minutes from the Federal Open Market Committee showed. “Many participants suggested that a variety of factors underlined the need for a careful approach to monetary policy decisions over coming quarters.” Please note the reference to “quarters” and not “months.”
More bad news for stocks from the bond market today
The 20-year Treasury bond, a laggard on the government debt curve since its re-introduction in 2020, topped 5% Wednesday for the first time since 2023. The move looks to be fueled by concern that President-elect Donald Trump’s policies on tariffs and tax cuts will lead to wider deficits and rekindle inflation.
Stocks fall as they begin to price in no rate cut until July
The Institute for Supply Management’s index of services advanced 2 points to 54.1 last month. That show of strength in the economy–readings above 50 indicate expansion–was enough to push stocks lower as the markets began to price in a delay in the next interest rate cut from the Federal Reserve until July The measure of prices paid for materials and services rose more than 6 points to 64.4, suggesting that the drop in the inflation rate in the service sector–about 70% of the U.S. economy–might be over.
Saturday Night Quarterback (Part 2) says, For the week ahead expect…
Investors see a ton of third-quarter earnings reports this coming week with news from Microsoft, Amazon, Meta Platforms, and Alphabet quite capable of moving the entire market. We’ll also get more consumer company (Coca-Cola and Kimberly-Clark for example) reports to show whether last week’s higher revenue but lower volume pattern continues. And Wall Street is expecting negative new from oil companies ExxonMobil (XOM) and Chevron (CVX) when they both report on Friday.
ExxonMobil shares drop on reports of SEC investigation
Shares of ExxonMobil (XOM) closed down 4.81% today on a Wall Street Journal report that the Securities & Exchange Commission was investigating a whistleblower complaint alleging that the company overvalued assets in the Permian Basin oil shale geology. The whistleblower complaint alleges that during a 2019 internal assessment workers were forced to use unrealistic assumptions about how quickly wells could be drilled to reach a higher valuation.
I’m selling Exxon Mobil out of my Dividend Portfolio as part of my annual portfolio rebalancing
I'm part way through the annual rebalancing of my Dividend Portfolio (with other portfolios to follow.) The initial stage of that process requires a close look at which of the stocks in the portfolio I'd like to keep for another year (based on their prospects for the...
Selling ExxonMobil out of long-term 50 Stocks portfolio; keeping shares in Dividend Income portfolio
To subscribe to JAM you need to fill in some details below including, ahem, some info on how you'll pay us. A subscription is $199 (although if you're subscribing with one of our special offers it will be lower) for a year for ongoing and continuing access to the...Red-hot Permian goes to white-hot with another big acquisition–and freaks out global oil market
To subscribe to JAM you need to fill in some details below including, ahem, some info on how you'll pay us. A subscription is $199 (although if you're subscribing with one of our special offers it will be lower) for a year for ongoing and continuing access to the...My Dividend Portfolio returned 26.79% in 2016
To subscribe to JAM you need to fill in some details below including, ahem, some info on how you'll pay us. A subscription is $199 (although if you're subscribing with one of our special offers it will be lower) for a year for ongoing and continuing access to the...Jim’s Stock Alerts
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