Following last week’s blood-bath on Wall St. investors ran into an immediate headache today as oil dumped more than 6% at one point to a new 12 year low before rising a bit. By the time energy commodities closed US oil finished down $1.75 a barrel, or 5.28%, at $31.41 a barrel. The NASDAQ finished in the red for the 8th straight day. For some, the current market downturn is reminiscent of the financial troubles on Wall St. in 1998. Are they similar? Check out the video below.
There was also word that dividend growth is expected to hit a 65-year low this year.
Daniel Alpert, managing partner, Westwood Capital says the 2016 market dive can be explained this way:
“While the plummeting price of energy — the result of insufficient global demand and huge new oversupply from North America itself — has cut America’s energy deficit to a level less than 20 percent of its 2008 peak, the overall current account deficit of the U.S. grew rapidly in 2014 and, more alarmingly, in 2015. The nation’s current account is the sum of the balance of trade (goods and services exports less imports), net income from abroad and net current transfers.”
“But here’s the brutal bottom line: The non-energy portion of the U.S. current account deficit, relative to GDP, has ballooned by 236 percent since its low in December 2013, during which period the energy deficit fell by 57 percent.”
“The U.S. economy is showing weakness in Nearly Everything But Employment (“NEBE”) and even its salutary pace of job formation is plagued by an unusual level of temporary and low wage hiring, painfully low labor force participation and very low levels of nominal wage growth.”
Here are the final numbers from Monday, 1/11/16 on Wall Street:
Dow Jones Industrial Average: 16,398.57 (+52.12/ +0.32%)
NASDAQ: 4,637.99 (-5.64/ -.12%)
S&P 500: 1,923.67 (+1.64 / +0.09%)
