So just how high will gas prices go before they retreat? At the time of writing, the price of a barrel of oil has surged from >$40 in 2009 to $111 in 2011, but where will the final resting place be? We’ll break down oil’s rise, and give a 2011 projection below.
Wall Street is hopping mad! For seven straight days the domestic markets have rallied, bond yields have steepened and it appears that we’re all ready to go straight back to Dow 14,000. But what’s in the way? What is coming the months ahead, and is inflation as serious as we thought it was?
My Take on Inflation
Is it any surprise that gold and silver were rising as they were ignored, and have been falling when they become recommended? Not really.
In fact, the reasons for such a movement are generally pretty simple: institutions ride the wave up, and they exit by selling off to retail trend followers. We’ve seen this phenomenon happen time and time again, and commodities are no different than are any other investments.
Risk is Gone
Investors may have renewed their appreciation for risk appetite, but that doesn’t mean they’re valuing earnings. Instead, discretionary income plays are top dog, as are the recovering media and financial industries. But with those sectors flying high, it’s time to tap some low multiple value stocks.
Chevron (CVX – 61.02) is reporting a $4 billion dollar first quarter profit, Exxon Mobil (XOM – 63.08) $8.4 billion, and ConocoPhillips (COP – 66.90 ) $3.29 billion. This past week these companies have been releasing their first quarter reports and many people are starting to wonder about these companies and the high oil (72)prices. I imagine the public and several politicians will be putting pressure on these companies looking for answers. Read more…