Yesterday was another quiet day of trading on Wall Street. The Dow (^DJI, DIA) slipped 0.10% but still managed to close above 21,000— just barely 21,008 on a rather light volume of 371 million. The NASDAQ (^IXIC, QQQ) also fell -0.10% to finish the day at 6,198, and the S&P 500 (^GSPC, SPY) lost -1.11 points to close down less than -0.1% to 2,411.
Financials were a main culprit for yesterday’s market slide, after logging in a great first quarter. Low interest rates and lack of volatility in the markets are starting to hit the big financial institutions. Some of the major bank heads also chimed in yesterday at a financial conference here in Manhattan: JP Morgan’s (JPM) chief financial officer said trading revenue is down 15% for the quarter. At a separate event crosstown, Bank of America (BAC) CEO, Bryan Moynihan sees a 10% drop in second-quarter trading revenue from a year ago. This had investors on edge and prompted selling the banks across the board.
As usual another market mover was energy. Benchmark US Crude lost $1.34, or 2.7%, to close at $48.32 a barrel in New York. It’s beginning to look like a repeat of last year’s drive time season. Gasoline lost 3 cents per gallon to close at $1.61. Good luck finding that at the pump here in Manhattan!
Alexis Christoforous and I often speak about the cost of Energy many times on Yahoo Finance’s Midday Movers. We usually discuss OPEC, inventory supplies and so on. However, one thing in this week’s “Numbers” was really glaring—The US only needs to produce 150,000-200,000 barrels a day more to take the lead over Saudi Arabia as the world’s largest crude oil producer. The roughly 100-year supply of natural gas made possible because of a new fracking technology, will make it to end-users this year. In the not too distant future, fracking could make it possible to replace coal and much of the oil we now consume.
While OPEC’s share of recoverable reserves are collapsing, the US Geographical Survey estimates that, since 1995, recovering reserves (that have increased from 150 million barrels) will top over 8 billion barrels. All this, thanks to new US technology in fracking.
Detroit is also getting in the game with the average MPG jumping from 23 MPG last year to 24.7 this year, with hopes of reaching 45-50 MPG by 2028. It’s no wonder gasoline consumption is at a five-year low.
So this year, think about driving to that summer vacation destination instead of flying. It may save you money and you probably won’t get dragged out of your seat.