Get The Ticker Tape delivered right to your inbox.

X

Stocks Continue to Slide on Oil Slick, Fed Fuzziness

Share Print
August 20, 2015

Stocks were on track for a third day in the red as traders come to terms with an indecisive Federal Reserve and the continued slump in oil prices—now near $40 a barrel and at their lowest in over six years. Energy shares, a big bloc in the S&P 500 (SPX), were lower in early action Thursday. Chinese shares fell overnight, while European equities were awash in red. The U.S. dollar traded mixed against the majors.

As for the SPX, an open near the bottom end of the recent trading range, near 2065, looks likely and will become an important line to hold for bulls.

SPX-below-2100

FIGURE 1: STILL CAPPED BELOW 2100?

The S&P 500 (SPX) finished below the closely watched 2100 line again on Wednesday as energy shares continue to dog the broad index. A tough test of the bottom end of the range, at 2065, looks likely for Thursday. Data source: Standard & Poor’s. Chart source: TD Ameritrade’s thinkorswim® platform. For illustrative purposes only. Past performance does not guarantee future results.

Fed: Mixed Message? Little sign of an aggressive Federal Reserve in July meeting minutes and yet Wall Street collectively slumped. Is the Street just tired of it, begging the Fed to just do something already and let us trade on? Fed minutes suggested that a September interest rate increase was still on the table. Maybe? Those July notes also revealed several Fed voters feel inflation may still be too low to take policy action. Federal Reserve Bank of San Francisco President John Williams warned in a speech in Jakarta against using interest rates as a tool to tame rising house prices. His comments follow the release of a benign consumer price index (CPI) report on Wednesday that did include a flare in shelter prices.

Jobless Claims: Fourth Straight Rise. The number of people who applied for unemployment benefits in mid-August rose for the fourth straight week. That’s not a good sign for anyone cheering on the U.S. economy. But it’s important to view the number in context. Initial claims have clung below the key 300,000 threshold for 24 weeks, the longest stretch in more than 15 years, government data shows.

Crude Supplies Still Build. The U.S.-traded crude oil benchmark moved closer to the $40 a barrel mark after a 4.3% dive in yesterday’s session and lower action early Thursday. U.S. oil prices in particular are under pressure after a surprise 2.6 million-barrel increase in U.S. commercial crude stocks last week on the back of higher imports on the Gulf Coast, MarketWatch reports.

Good trading,
JJ
@TDAJJKinahan

Dive In to the Market

Learn the thinkorswim® platform from those who know it best. Join daily Swim LessonsSM at 11:30 a.m. ET. 

JJ Kinahan

JJ began his career in 1985 as a Chicago Board Options Exchange...

Read full bio »
Recent Posts
March 27, 2017

With Health Care Bill Dead For Now, Market Focus Turns To Tax Reform, Key Data

Health care legislation never made it to a vote Friday, but surprisingly, the stock market didn’t react much, and could open the new week focused on tax reform.

March 24, 2017

So Tired of Waiting: Yesterday On Repeat as Health Bill Remains Center Stage

Yogi Berra once said, “It’s like déjà vu all over again.” It feels that way now as investors wait for a health care vote in Washington.