The global oil glut continued to worsen overnight, pushing the price of oil to its lowest level in six years. This Thursday morning saw WTI crude within pennies of $40 per barrel, a significant psychological threshold. Worse, there is currently no convincing scenario in which prices can quickly rebound, as global economic growth continues to slow and deflationary pressure mounts.
The market is following oil lower in morning trading, though the worst damage is being seen not in the energy sector, but in media, finance, and technology. In other news, the US Initial Unemployment Claims number for last week was 277K which, while not particularly good, is not nearly bad enough to raise the Street’s hopes that the Fed will delay the raising of interest rates.
At present, stocks are down. The S&P 500 is down 0.84%, the DJIA is down 1.09% and the NASDAQ is down 0.95%.
Here are your Thursday morning market metrics. The industries showing strength today are Metals & Mining, Energy Equipment & Services and Oil, Gas & Consumable Fuels. The industries showing weakness today are Media, Diversified Consumer Services and Road & Rail.
The VIX is up 6.49% to 16.24 after closing yesterday at 15.25. The most active options this morning is SPDR S&P 500 ETF (SPY) with 20,000 January expiring $220 calls changing hands. The total put-call volume ratio is 0.96 (392,974/408,436). NYSE Adv/Dec 494/2,335. NASDAQ Adv/Dec 461/1,898.
Julian Close became a stockbroker in 1995. In his 20 years of market experience, he has seen all market conditions and written about every aspect of investing. Julian has also written extensively on corporate best practices and even written reports for the United Nations. He graduated from Davidson College in 1993 and received a Master of Arts in Teaching from Mary Baldwin College in 2011. You can follow Julian’s daily hedged options trades and his unfolding market commentary via twitter: @JulianClose_MIC.