Bad weather is already driving up oil prices (and George Clooney ain’t happy)
Dow: 13,103 (-0.17%) S&P 500: 1,409 (-0.08%)
Hurricane Isaac has already delayed the Republican National Convention, ruined many a late-summer bachelor party fishing trip and completely taken over control of The Weather Channel (kudos on some magnificent storm journalism, by the way). On the flip side, the meteorological wonder made energy stocks the big movers of the day. Stocks remained mostly flat again as investors look forward to Federal Reserve Chairman Ben Bernanke’s policy announcement from Wyoming on Friday. Two major econ reports on housing and consumer sentiment cancelled each other out and the Dow ultimately finished down 22 points.
Hurricane Isaac shuts down oil refineries, pumps up record gas prices for Labor Day
Condolences to our Cadillac Escalade-driving MarketSnacks readers – Gas prices are bound to hit record highs for Labor Day weekend as Hurricane Isaac is causing off-shore oil rigs and Gulf Coast oil refineries to shut down (not to mention an oil refinery in Venezuela actually exploded last week which sadly killed 48 people). The sudden cut in oil supply is coming just as Americans seek that final 3-day opportunity to show a little skin. Commodity traders foresee a shortage for the gas-thirsty SUVs hitting the road this weekend, so the price of gasoline on the futures market hit $3.15/gallon today, up 22% since just June 21. The news even drove up gas powerhouse Chevron (CVX) to become the blue chip-heavy Dow Jones Industrial Average’s top performer. Normally gas prices start to fall off this time of year as the summer is coming to an end and demand for gasoline slips, but the cut in supply has more than offset the typical seasonal effect.
S&P/Case Shiller Home Price Index rises again, but Consumer Confidence falls
One of the major monthly housing reports, the S&P/Case-Shiller home price index analyzes value changes in residential real estate from 20 metropolitan regions. Homeowners were psyched to today to see the index rose in June for the 5th straight month, reaching a positive year-on-year rate for the 1st time since 2010. Investors hope this trend indicates home prices are recovering, but consumer confidence didn’t fare as well today. The non-for-profit research group The Conference Board takes a monthly survey of how folks feel about the economy and confidence in August dipped more than expected, falling to last year’s low (that was a dark time when Congress was stuck in its debt ceiling crisis and The Dark Knight Rises trailer hadn’t even been released yet). Consumer confidence has been inconsistent recently and can change dramatically from month-to-month.
Tomorrow:
- A significant amount of economic news from all over Planet Earth…
- In the US, look for 2nd quarter real GDP numbers, July pending home sales and the Federal Reserve’s Beige Book provides the central bank’s analysis of the US economy
- …And outside the US, some interesting reports: Italian retail sales, Japanese retail sales and the German Consumer Price Index will be scrutinized for signs of inflation
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