Is the Mid East War bringing oil up and stocks down?

Question

Was there another reason that the market was down last week other than Mid East War bringing oil up and stocks down? Is high fuel prices hurting tourist stocks like DIS.? - Sylvia

Answer 1

Turn off the TV. It does not give you knowledge or valid reasons for the gyration of markets. It's only entertainment and they're only concerned about ratings and making money themselves. They're only interested in dramatization.

Fear and uncertainty are factors, but the Dow was down 1,000 pts before the Mid-East flare-up. Greed and demand drove it up, and fear and supply drives it down. Typical Bear Market action.

If Dow 10700 doesn't hold, look out below, probably another 1,000 pts to go. And yes, the media will find and attach a "reason."

Answer 2

Actually, crude is back above $75/bbl. But crude was trading above $75/bbl before the conflict broke out. The second poster is correct, the market is way overvalued, and overvalued markets will realign themselves. Also, he is correct in the Dow breaking below 10,700, which is key support. If 10,700 is shattered, the next major support level is 10,300 and nothing major again until 9,200.

When you have a market bubble like this, the market when it corrects will give back 90% to 100% of all the gains during the previous run up. In 1929, the market lost 89% of it's value.

When this bear is done (the Dow runs on a 17-18 year cycle, the last bull cycle was 1982-2000, 18 years, this is 2006, so we are only 6 years into this bear, have at least another 11 years to go), I see the Dow trading in the 1000 range. It's going to be ugly.

Answer 3

Yes, you're exactly right, since traders are fearful that the confilct will spread to other ME nations and limit oil supplies - they drove up the price last week betting that others would be willing to buy the contract at even higher prices. Others in the market are afraid of inflation and rising interest rates, which would eventually trickle down to borrowers, shrinking the asset bubble and and slowing the economy. RE: Disney, as of the last conference call in May, management wasn't too concerned about energy prices - this is from the CFO:

Now, the increase in the gasoline prices does not appear to be directly affecting our theme park business. In fact, over the years, fuel costs have not had a demonstrable effect on our attendance. As much as no one likes to pay more at the pump, the incremental incremental increase in a family's vacation budget due to higher gas prices is relatively small in relation to the overall cost of a vacation. For the average American travelling by car, a $1 increase per gallon would result in increase of about $40 for the trip as a whole. The impact is also relatively modest for those visitors arriving by air. So, unless the increase in oil prices meaningfully impacts consumer confidence and spending, we would not expect to see gas prices have a large affect on our parks this summer. Our overall theme park results were dampened somewhat by performance at Disneyland Paris, where volumes and spending were down in the second quarter in part due to the timing of Easter. However, for Q3, the benefit of Easter and the opening of Buzz Lightyear are having a positive effect on trends as both bookings and attendance are currently running meaningfully ahead of last year.

Answer 4

rattling, thats awesome that you dug this up for each individual to study (no im no longer being sarcastic) and thanks for posting. ok i love the maths yet im going to counter your arguement with some thing only a tad bit ordinary-er. How about we provide up our V-8, 5,000 pound 0-to-sixty monster machines? start up utilising flourescent bulbs, push congress to make photo voltaic skill rewarding for manufacturers and promises up being lackeys to the oil businesses era? If we dont change our conduct the diversities will be compelled on us. good day why dont you take advantage of a few portraits producer-application like ( i dont understand ) Adobe Photoshop and placed this together on youtube. maximum individuals will draw close it and carry it in case you take advantage of images or slide tutor format with some cool rock music contained in the history and also you doing a voice over? i tips watching "We were warned, the visual attraction oil disaster" by technique of CNN. Starring James Woolsey ex cia-director, its a docu-drama. particularly scary stuff.

Answer 5

actually, oil has dropped below $75/barrell again.