Energy Futures Crumbled To Lowest Levels
Energy futures crumbled to their lowest levels of the year overnight as a combination of over-supply & economic concerns continue to weigh heavily on the market. Prices have rebounded sharply off the overnight lows however (crude oil is trading up $1 and products are up 3 cents) as equities are finding renewed strength after another big sell-off Monday.
Depending on which headline you read, the sell-off in equities may be caused by falling oil prices, or the fall in oil prices may be caused by the drop in stocks. The reality seems to be that both asset classes are struggling through a crisis of confidence lately that’s threatening to become a full-on bear market if they don’t snap out of their funk soon.
The FOMC begins a 2-day meeting today. According to the CME’s FEDWatch tool, traders are putting a 71% probability of another interest rate hike announcement tomorrow. That probability has been declining lately as economic concerns have increased, and the US president launched an unprecedented barrage criticism on the central bank.