Oil prices plunge, putting pressure on markets
November 26, 2018
US Market Remains Significantly Overvalued Despite Black Friday Slip
November 26, 2018It may have been Black Friday, but Wall Street was seeing red.
All of the major stock indexes ended in negative territory during Friday’s shortened trading session as continued worries about a slowing global economy were fueled by a steep sell-off in oil.
Chevron and Exxon Mobil were the biggest laggards on the Dow Jones industrial average Friday falling 3.4 percent and 2.7 percent, respectively.
The blue chip index fell 178.74 points — or 0.7 percent —for the day and 4.4 percent for the week — marking the worst Thanksgiving week for the gauge since 2011.
Other indexes also felt pain during the shortened holiday week with the S&P 500 and Nasdaq giving up 3.8 percent and 4.3 percent, respectively, over the week.
Markets have been spooked in recent weeks by trade tensions, looming interest rate hikes by the Federal Reserve and fears of a global slowdown. But oil has taken center stage on oversupply worries.
“The real motive [for today’s sell-off] was the collapse in oil prices,” Peter Cardillo, chief market economist at Spartan Capital Securities, told The Post.
Oil topped $75 a barrel in early October — its highest level in more than four years — but prices have tumbled into bear market territory from there.
“A decline in oil prices is basically suggesting a global slowdown,” Cardillo said.
Crude oil fell 7.7 percent, to $50.42 a barrel Friday — its steepest drop in more than three years — as traders fretted over production targets ahead of next month’s OPEC meeting in Vienna.
The OPEC nations are expected to hold informal talks at next week’s G20 summit in Buenos Aires.
Wall Street will also be watching the G20 summit closely for signs that trade tensions between the US and China will cool as President Trump and President Xi Jinping are expected to discuss trade.
“Realistically the best that we are going to see from the G20 is an agreement by the US and China to keep talking,” Jasper Lawler, head of research at London Capital Group, said in a note Friday.
