Whiplash on Wall Street: Oil Surges, Hurricane Milton Looms, and Unlikely Football Triumphs
It’s always the unexpected events that make the eyes grow wider. Hurricane Milton is zeroing in on the Florida Gulf Coast. Middle East tensions are crackling as the threat to oil supply in the Middle East is whipsawing the commodities markets. For the first time in 40 years, Vanderbilt beat Alabama in football, and the goal posts are now in the Cumberland River. Just the talk of an Israel retaliation against the oil infrastructure in Iran led to the largest weekly increase in oil prices in more than a year. Once again, it’s headline news at the wheel and the driver has a bottle of Jack Daniels between his legs as the sporadic reports coming out are sending commodity traders from guard rail to guard rail. It’s all serious business. Israel’s ground attack on Hezbollah in Lebanon and Iran’s missile strike retaliation are adding fuel to the fire of an escalating and more widespread conflict. Curtailing Iran’s 4 million barrels per day of production and the commensurate Iranian oil exports would most certainly hamper the Iranian economy. China would be most impacted, as well, as they are presently purchasing close to 90% of the Iranian exports. Having said that, 20% of the global oil demand emanates from the Middle East shipping lanes. So war related restrictions to this highway would give contango a prolonged dirt nap. WTI ended the week at $74.38/barrel, surging up by about 9%.
Closer to home, there is more economic data to scrutinize. On Thursday, the September CPI report comes out. The whisper number is +3.2% year-over-year, and to be up 0.3% on a month-over-month basis. This probably will not influence the next Fed cut, as the jobs report might have temporarily put the brakes on that. All the while, the stock market continued to creep to even newer highs, up about 0.2% for the week, supported by that surprisingly strong jobs report on Friday.
We’re all holding our collective breath as Hurricane Milton approaches the Florida Gulf Coast. Please keep in mind those that will be most affected by this pending disaster. Any amount of support that can be provided will certainly be of value to the unfortunate folks in its path. Let’s all hope that somehow things turn out better than expected, and that people can stay out of harm’s way.
