Stocks are trying to extend yesterday’s late-day bounce in the early going. But Big Oil has been the Big Story lately, with crude rallying sharply again yesterday before easing back this morning. Gold and silver are a bit higher, while the dollar and Treasuries are lower.
On the news front...
Crude oil continues to be this market’s standout star, extending its gains to more than 33% in the last three months yesterday. Driving the action: Production cuts led by Russia and Saudi Arabia. The OPEC+ cartel members either as part of a group or individually slashed output by 2 million barrels per day in October 2022, another 1 million BPD in May 2023, and yet another 1 million BPD in July. The Energy Select Sector SPDR Fund (XLE) has risen more than 5% in the last month as a result, easily outperforming the S&P 500.
The fallout from the real estate bust in China continues to get worse, with trading in shares of developer China Evergrande Group halted on the Hong Kong stock exchange overnight. Chairman Hui Ka Yan was reportedly put under “residential surveillance” earlier in September, though not formally arrested. Shares of the troubled firm last traded down 19% to 32 Hong Kong cents, while its US dollar bonds are priced at less than five US cents on the dollar.
Seven Republican candidates for president took part in a second debate at the Ronald Reagan Presidential Library in Simi Valley, California. But once again, front-runner Donald Trump skipped the festivities because he still holds a commanding lead among all contenders. Early results suggest the event failed to change that dynamic in the 2024 race.
Finally, Costco Wholesale (COST) may be the LAST place precious metals enthusiasts think about shopping for bullion. But turns out the retailer sells 24-karat, one-ounce bars from a pair of suppliers – and they typically sell out not long after they’re listed for sale (only two per member please!)
That said, it’s been a rough stretch for gold lately given the double-barreled rise in rates and the dollar. The yellow metal slipped below $1,900 an ounce this week, and is down almost 4% in the last month.
