With security concerns in the Middle East receding and the commodities bubble deflating, oil prices are headed sharply lower. Gas prices should follow suit: Analysts say that prices will get 25 cents a gallon cheaper in the next few days, and drop even further as the summer rolls on.
Despite turbulent times, U.S. markets are rising again. But is this a temporary bump, or the return of a bull market? The sharp-eyed analysts of Morgan Stanley and Goldman Sachs say its the latter, and their money is on strong growth ahead.
Markets hate uncertainty more than bad news, which is one reason they've swooned recently. But technical analysis looks at the patterns deeper than the daily news, and charts suggest a real bear ahead.
It's easy to be pessimistic these days. Libya's civil war, surging oil prices and the disaster in Japan have combined forces to send financial markets tumbling. But the cold, hard facts about the economy paint a more optimistic picture.
Most Wall Street experts are far better equipped to analyze a corporate risk over a political threat. But today, it's political unrest in the Middle East and beyond that's driving world markets. So we asked Ian Bremmer, president of political risk consultancy The Eurasia Group, to break down the major developments and what investors should expect.
Given the prospect of $4-plus gasoline this summer, what's an American to do? Beyond switching to a higher-MPG vehicle, you can consider buying some oil stocks with plenty of upside potential. Here are five candidates, if your risk appetite is hardy enough.
Recent market sell-offs may have been more about paranoia than about real risk. JPMorgan calculations indicate that the potential impact of rising oil prices on the economy may be less than most investors think. But the fear factor itself also can't be overlooked.
As the crisis in Libya continues to shake world oil markets, many voices are calling for President Obama to tap into the Strategic Petroleum Reserve. With gasoline prices up 33 cents a gallon in the last month, that's a tempting idea. It's also the wrong one.
Despite all the worry over the impact of rising oil prices, recall that the U.S. is now a largely services-based economy. And observe that the rising wages that have led to real overall cost rises in decades past are nowhere to be found today. Exhibit A is in Wisconsin.
As pump prices shoot higher each day, signs of motorists rationing gas purchases have begun springing up around the country. People are buying fewer gallons per fill up and paying more in cash than with credit. Clearly, motorists are already cutting back.
Political turmoil in the Middle East keeps growing, with the ouster of Egyptian president Hosni Mubarak, rebellion in Libya and riots in Bahrain. It's no wonder that businesses with investments in those countries are feeling nervous. And that's benefiting purveyors of political-risk insurance, who are seeing premiums rise.
With Mideast turmoil chasing oil higher and stocks lower, it's a good time to check the charts and see what price levels seem to be key "lines in the sand." Some indicators have been warning for months that the steep rally was preparing to reverse.
U.S. bond prices fell Wednesday on violence in Libya. An auction of $35 billion in five-year notes met with little demand, while 10-year Treasury prices fell 22 cents per $100 invested. Stocks also declined as a result of the Libyan instability.
Americans could see gasoline spiking 10% to 18% higher in coming weeks as a result of the unrest in the Middle East, but they're unlikely to rocket as high as some are predicting -- unless the uprisings spread to Saudi Arabia. In that case, all bets are off.
Worried about the sharp shock political unrest is giving to crude oil prices, international officials said oil-consuming nations have emergency reserves they can use to stabilize markets in case the violence in Libya and the wider Middle East escalates and crimps production.