Friends

There was a lot to unpack today. First of all, oil prices are spiking as the war with Iran heats back up. WTI over $90 a barrel is becoming a problem again. Second, the bond market continues to deteriorate as yields climb higher. Then add to that, the disappointing share price reactions to stocks like Alphabet and Tesla put massive pressure on the market averages. Don’t get me wrong, Alphabet (Google) had great earnings. What market participants are concerned about is the massive increase in capital expenditures (CapEx) that continues with our major tech companies. Hundreds of billions of dollars of extra spending is concerning. It may all be proven to have been a wise investment in coming years, but investors are concerned that these companies are moving away from being cash cows to instead being massively indebted. Only time will tell if it’s money well spent.

As for today’s action, by the close the Dow Jones Industrial Average was down 506 points to finish the day at 51,711. The S&P 500 was down 90 points to close at 7,408. The Nasdaq Composite Index was down 553 points to close at 25,137. Gold was down $103 to trade at $4,048 per ounce, while the aforementioned oil was up $4.87 to trade at $91.70 per barrel WTI.

Corporate earnings continue to be very good. But today that wasn’t enough. There are several headwinds for investors to navigate at the moment. Let’s see how the week finishes out tomorrow. Stay tuned.

Have a nice evening everyone.

Jim