Tank Tiger Tales: Cape Cod Adventure, Oil Prices, and Market Surges
It was great seeing everyone on Cape Cod last week. We saw many customers of The Tank Tiger and were excited to meet so many potential new ones. In fact, we had so much fun that The Tank Tiger is operating out of our Falmouth, MA office this week where this morning it is a delightful and refreshing 59 degrees outside. For those of you who did not attend, next year’s event is June 2024 so please put it on your calendar. We promise that whatever else you’d be doing that day would be craney in comparison to Mass Appreciation Day 2024.
We’re almost halfway through the year now and have witnessed a marked decline in crude oil prices since the start of the year. This month, prices actually touched on the lowest point since December 2021. Pressure on prices seems to be emanating from a slumping China economy. In reality, China has caught a cold because the rest of the world is sneezing. The latest export figures from China strongly suggest a weak global demand from other consuming nations due to higher inflation in US and Europe. Exports from China are down 7.5 percent when you compare May of this year to last year’s figures. The foot bone’s connected to the leg bone. The leg bone’s connected to the knee bone. The knee bone’s connected to the thigh bone. Etcetera Etcetera. So while the rest of the world is hiking interest rates to cool off inflation, China is planning an economic stimulus to enhance consumption. US Secretary of State Antony Blinken held “candid” and “constructive” talks with China’s Foreign Minister in Beijing. Good stuff.
Brent crude closed the week at $76.61 a barrel while WTI settled Friday at $71.78. The good news for crude bulls is that Brent was up for the week by 2.4% and WTI rose 2.3%. The big news last week in the terminal space was that Gibson Energy has struck a deal with Buckeye Partners to buy the South Texas Gateway oil terminal for $1.1 billion in cash. Not to be outdone, our good friends at BWC Terminals and Royal Vopak have entered into a binding agreement to sell the Vopak terminal in Savannah to BWC. The Tank Tiger is happily lining up customers to help keep their tanks full.
Restaurant company Cava (CAVA) traded at more than double its IPO pricing level as investors gobbled up the first restaurant IPO in almost 2 years. Of course, no one was bullish on restaurant stocks during the pandemic. Cava is a Mediterranean fast-casual restaurant and now has a market capitalization of almost $5 billion, giving it a higher valuation than Wendy’s and Shake Shack. The chain believes that growing diversity in the US will make them successful as we diversify our taste buds. But they don’t even sell lahmacun! Did you know that lahmacun is 4000 years old and much older than pizza, its Italian cousin, which was born in the 18th century. I bet if someone had a food truck that sold lahmacun, it would be a venture capitalist’s dream. Wall Street’s S&P 500 share index has rallied into a bull market, defined as a 20% gain from a recent low, and closed on Thursday at a 14 month high. Yup…$$$MR. MARKET$$$ is back buying stocks. The CPI numbers for May showed a deceleration of inflation. The PPI numbers also declined on both a M/M and Y/Y basis. Americans filing for weekly jobless claims came in higher than anticipated, so all of these numbers are showing an economic slowdown. Of course, Wall Street loved this, since it hinted that the Fed may actually slow down the interest rate hikes. For the week, the Dow Jones average rose 1.3% and the S&P 500 climbed 2.6% – the index’s fifth straight weekly gain and its best performance since March – and the Nasdaq Composite jumped 3.3% for its eighth winning week in a row. The S&P and Nasdaq hit their highest levels since April 2022 this week. Yup the market is getting hot, but so is Houston…blech
