Last week was a bit of downer for investors as the price of crude climbed to $100 a barrel and sent the various indexes and averages south.
The S&P 500 dropped below 6700 as concerns grew over the impact of rising crude prices sending the cost of living higher.
During the week the latest CPI report came in much tamer than expected with inflation being stable.
Of course this jump in crude will put a damper on that report next month.
It won’t take much, however, though to get crude prices down.
The problem is the inability to get tankers past the Strait of Hormuz eliminating 20% of the world’s oil supply. Iran states that it will block tankers and I’m not sure exactly how the U.S. will counter that threat.
It is much harder to fight drones, as both Russia and Ukraine havefound to be true.
I believe shipping lanes will open as Iran can’t exist without selling its oil production.
I was gone last week on a cruise with my daughter and her family so I was not paying as close attention as usual to the markets.
In this information age, you can be bobbing around in the middle of the Gulf and still stay in touch.
I was almost glad to be gone as the news cycle was totally focused on Iran and what was coming out didn’t really tell you what you wanted to know.
It was more just wait and see.
Not being a patient person, that makes me uncomfortable.
I’m left to speculate on my own, which is not good.
I will give myself credit for not panicking and generally falling on the optimistic but realistic side.
I realized there is little I can do so I turned to reading novels in spare time and turned off the news.
Not recommending, but it got the job done.
Returning home, however, I was confronted first and foremost by the rapid rise in fuel cost. I drive a diesel truck and that sticker shock was tough to withstand.
Crude has such an enormous impact on our economy. Luckily we generate a significant amount of our energy through natural gas, coal and renewable energy. Transportation costs will hit home as products are shipped.
As we were driving back from Galveston, I could only think of how much more these shipping companies will have to charge to make up for this sudden surge.
I’m glad I am not traveling anytime soon by air either.
It goes further into what the impact will be on food as fertilizer and production will be impacted.
There will be a lag time where this cost will have to work itself through.
Our hope rests on a quick resolution of the Iran conflict.
Our attention span is that of a gnat, probably a good thing.
Eliminates a lot of stress.
Today is a new animal and we adapt far quicker than we used to.
Just when you thought your children should be learning code for a secure job, along comes AI and that is gone.
Now we see the move to train for the trades, like plumbers, contractors and electricians.
I don’t know if you noticed, but mechanics now make almost $100 per hour.
As for the markets, I’m amazed how every pullback is an opportunity for traders. This has been the case for three years.
Just when it looked like Bitcoin was in trouble it has recovered.
The thought that companies like Microsoft and Oracle would be passed by has now found doubters.
I’m unsure that with things changing so quickly you can have a trend. I do however believe volatility is here for some time to come.
If this ride gives you motion sickness, you may have to settle for a gentler, less risky ride for a while.
Did I forget to mention that you have all the political theatrics due to the upcoming elections this fall. This is a ride that thrill seekers relish.
It is not going to be the Tea Cup ride at Disney, but the biggest and fastest roller coaster you can imagine. So buckle up thrill seekers.
