What Do The Macros Tell Us About The Market?

“The following is an excerpt from Tim Snyder’s “Weekly Quick Facts” newsletter. Tim is an accomplished economist with a deep understanding of applied economics in energy. We encourage you to visit Matador Economics and learn more about Tim. While there, you can sign up for his completely free Daily Energy Briefs and Weekly Quick Facts newsletters.”

When the macros make the market in energy and stay way out ahead of the U.S. Fed!

This week’s attention has been almost entirely on the U.S. Federal Reserve and raising the Discount Rate by 50 basis points. The Fed’s charge is to bring inflation back in line with the goals of a stable market. The problem is this, when the actions of the FED are either too weak or too late, when they finally do act, it may be ill-timed at the very least, if not outright wrong.

Over the last few weeks, we have seen the GDP turn negative at -1.4%. We saw the Consumer Price Index come in at an 8.5% rate, year over year, and we got the Producer Price Index came in at a 40-year high of +11.2%.

These macros alone showed the markets just how far U.S. inflation had gotten out of control. No matter how much the Fed, or the Treasury Secretary, said the word “Transitory,” they just couldn’t fool markets back into line. It takes action. The macros tell us the FED action is “too little and too late.” Continue reading "What Do The Macros Tell Us About The Market?"

Retail Fuel Prices Skyrocket

“The following is an excerpt from Tim Snyder’s “Weekly Quick Facts” newsletter. Tim is an accomplished economist with a deep understanding of applied economics in energy. We encourage you to visit Matador Economics and learn more about Tim. While there, you can sign up for his completely free Daily Energy Briefs and Weekly Quick Facts newsletters.”

Today’s fuel prices are showing us that with increasing demand, the price for refined products will continue to rise, even with a somewhat stalling crude oil price. Today’s EIA posting for On-Highway Retail Gasoline price was $4.107 per gallon. Remember, in 18 states, beginning this Saturday; the US EPA has mandated the more expensive “Summer Blend” of gasoline. This gasoline blend will stay in place until Mid-September, as demand remains strong and the temperatures are warmer this time of year.

Diesel prices look to be outpacing gasoline and the changes in crude oil prices as well. Monday’s EIA posting for On-Highway Retail Diesel price was $5.16 per gallon. These prices will soon eclipse the records we saw in March of this year. We were trading at $5.25 per gallon on March 14, 2022, and with diesel fuels' current supply issues, we will top this by Mid-May. This will push food prices higher and make planting time in the Agriculture space as expensive as it ever has been!

We’re still on an upward track on fuel prices! Continue reading "Retail Fuel Prices Skyrocket"

Biden: "There's Going To Be A New World Order"

But what did he mean when he said that? This week, lots of news outlets are beginning to look at the prices at the pump for retail gasoline and diesel. As a result, there has been a sort of renaissance in the media as they are only now beginning to understand the mechanics involved in pricing retail fuels.

Beginning in the Spring of 2000, retailers in certain "out of compliance" states from an emissions standpoint were required to adjust their gasoline formulations to reduce the effects on air quality.

The adjustment comes in a measurement called Reid Vapor Pressure, or RVP. RVP is a measure of how fuel evaporates at a given temperature. For example, summer blend gasolines have a lower RVP to prevent evaporation when temps rise. The goal here is to prevent as much unhealthy ozone as possible and reduce smog. We have all seen it, and this is a way to try and reduce the effects on the environment and help us all breathe better.

To counter this, the Biden administration is pushing to reduce/eliminate fossil fuels from our fuel supply. The concept, while understandable in concept, falls short. Any rational thinking business person considers their market conditions. Are they ready for a transition? Continue reading "Biden: "There's Going To Be A New World Order""