Weekly Update 4/4/2023
Tech Sinks as Oil Surges
OPEC cuts oil output
Tech lags to start second quarter
Inflation fears rise again!
Dow rallies
Weekly Meetings:
INVESTMENT CLUB TUESDAYS 7 PM (CCB140)
INVESTMENT FUND TUESDAYS 8 PM (CCB140)
(BOTH MEETINGS ARE OPEN TO THE ENTIRE STUDENT BODY)
—Market Madness—
This is Why GPT 5 Will Change The World (CHAT GPT 5)
Oil surges, Dow rallies, tech lags to start second quarter: Stock market news today
Oil prices surged on Monday, pushing the Dow higher and presenting investors with a new wrinkle to start the second quarter after a first-quarter rally kickstarted markets in 2023.
When the closing bell rang on Wall Street on Monday, the S&P 500 (^GSPC) was up 0.37%, the Dow Jones Industrial Average (^DJI) was higher by 326 points, or 0.98%, and the technology-heavy Nasdaq Composite (^IXIC) was day’s laggard, falling 0.27%.
Crude oil prices were higher on Monday after and an unexpected oil supply cut from OPEC+ announced over the weekend shook markets. Oil gained more than 6% on Monday, with WTI crude oil — the U.S. benchmark — trading north of $80 a barrel while the international benchmark price, Brent crude oil, was trading near $85 a barrel.
A 4% gain in shares of Chevron (CVX) helped the Blue Chip Dow lead markets to start the week. UnitedHealthcare (UNH) gained nearly 5% to lead the Dow.
On Sunday, the OPEC+ oil cartel — which includes OPEC members plus Russia — announced it would cut daily production by more than 1 million barrels of oil beginning in May and running through the end of the year.
“Even though, like OPEC, we expect only subdued demand growth this year, the scale of supply cuts will send the oil market balance into a deficit in 2023, with an even larger deficit in Q4,” wrote Caroline Bain, chief commodities economist at Capital Economics, in a note to clients on Monday.
Last month, the price of oil dropped to an 18-month low as a glut of supply and fears over the global economy shook the oil market. Additionally, a surge in the dollar as investor concern rose over the banking crisis pressured oil.
But as worries over an acute financial crisis worldwide have ebbed, the dollar has eased and WTI rose by nearly $10/barrel over the final two weeks of March.
How will OPEC+ oil cut impact US gas prices? Experts weigh in
A group of oil-producing nations imposed a significant cut in oil output with far-reaching consequences for U.S. gas prices, industry analysts told ABC News.
The alliance of countries known as OPEC+, led by Saudi Arabia and Russia, agreed on Sunday to cut oil output by 1.2 million barrels per day starting in May, which amounts to removing roughly 1% of oil from the global market. Regardless of the production cut, prices typically rise in the summer due to a spike in demand as car owners take road trips and families fly to vacation destinations. The OPEC+ output decision, however, will send gas prices as much as 30 cents higher per gallon than they would have spiked otherwise, the analysts said. I certainly think there’s going to be upward pressure on prices as a result of these production cuts,” Patrick de Haan, the head of petroleum analysis at GasBuddy, told ABC News.
The announcement from OPEC+ met disapproval from the Biden administration. We don’t think that production cuts are advisable at this moment, given market uncertainty, and we’ve made that clear,” White House Spokesman John Kirby said on Monday. The production cut coincides with an ongoing rise in gas prices. The national average price for a gallon of gas stands at $3.50, which marks a 2% increase over the past week and 3% spike over the past month, AAA data showed. In California, the state with the highest gas prices, the average price per gallon is $4.83, according to AAA.
Average gas prices nationwide remain nearly 20% lower than where they stood a year ago. Despite the anticipated rise in gas prices as a result of the OPEC+ production cut, analysts do not expect gas prices to reach the eye-popping levels on display last summer. People are waving their hands and feel like their hair is on fire: What does this mean for the U.S. consumer?” Peter McNally, a global sector leader for industrial materials and energy at Third Bridge, told ABC News about the production cut.
“Year over year, we’re still looking at lower prices,” he added. McNally said he expects U.S. gas prices to rise between 20 and 30 cents in additional cost as a direct result of the production cut; while de Haan, of GasBuddy, said he anticipates a more modest increase of between 5 and 15 cents. The OPEC+ production cut announced on Sunday follows a previous cut in October that saw the group of oil-producing countries slash output by 2 million barrels per day.
—CRYPTO CULTURE—
Dogecoin jumps more than 30% after Musk changes Twitter logo to image of shiba inu
Niche cryptocurrency dogecoin spiked more than 30% on Monday after Twitter CEO Elon Musk replaced the blue bird on his company’s website with an image of a shiba inu, the digital coin’s logo. On Friday, attorneys for Twitter and Musk asked a federal judge to toss out a $258 billion lawsuit from 2022 that accused the billionaire of manipulating dogecoin’s price and driving it up over 36,000%.
After the Twitter logo was altered to a shiba inu image, Musk shared a meme about the change to his 133.5 million followers on Twitter. The dog appeared only for some users of Twitter, including those on its website.
Twitter did not respond to a request for comment.
Musk’s lawyers described his public statements about the coin as “innocuous and often silly tweets,” in a court filing Friday.
But Musk’s public endorsement of the coin goes further than social media messages. Two of Musk’s other companies, Tesla and the Boring Company, are named in the lawsuit.
In December 2021, Tesla announced it would accept dogecoin for some merchandise. At the time, Musk said on Twitter that Tesla would “see how it goes.”
Dogecoin rose more than 20% following that tweet. In January 2022, when Musk announced on Twitter that dogecoin payments were live, the cryptocurrency jumped as much as 15%.
Tesla does have digital assets on its books, including bitcoin, and still accepts dogecoin as payment for some merchandise.
“We have not sold any of our dogecoin,” Musk said on an earnings call last year. “We still have it.”
Musk has indicated that he personally holds dogecoin as well.
In a recent tweet, responding to a photograph of himself next to News Corp. Chairman Rupert Murdoch, Musk simply wrote: “Dogecoin.”