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Thanksgiving Week US markets: Mostly disconcerting and often misleading

Written By | Nov 21, 2021
Thanksgiving Week, US markets

Cartoon by Branco. Reproduced with permission and by arrangement with Comically Incorrect. See link below article.

WASHINGTON – Last week’s trading action on US exchanges proved disconcerting, to say the least. That’s typical, though during the average Thanksgiving Week for US markets. Following a nifty bull run after September’s plunge, US markets underwent a brutal face-plant last week. That’s likely to continue, more or less, during the upcoming Thanksgiving Week, given the shortened trading hours due to our nationwide holiday celebration.

What might we see on Wall Street this Thanksgiving Week? Prices at the pump, anyone?

The problems facing current markets are many-layered.

First of all, despite ever-increasing fuel prices, the Biden Junta persists in its refusal to back off its idiotic return to the Obama Era’s War on Fossil Fuels.

To recap: We’ve already endured a likely final termination of the Keystone XL Pipeline project from Canada, screwing Canadians as well as American consumers. Not to mention the unions representing oil workers, which, inexplicably, funded fossil fuel-hating Democrats in Election 2020 for whatever reason. Their inevitable reward was the cancellation of Keystone XL, resulting in the loss of roughly 10,000 oilfield construction jobs.

Why screw consumers already hit with hyperinflation? A return to Obama’s original War on Fossil Fuels, that’s why…

The purveyors of “Bidenomics” apparently plan to further aid the (allegedly) post-Covid US economic recovery by shutting down an existing and now even more vital Canada to US fossil fuel pipeline crossing the Straits of Mackinaw that divide Michigan’s Upper and Lower Peninsulas. Just like Evil Governator Gretchen Whitmer, the Wicked Witch of the MidWest, wanted to do in the first place. And just in time for a bitter Midwest winter, too.

Why?

Same reason that Obama destroyed the American coal industry. Using the global warming climate change excuse, Obama’s rapid destruction of coal-fired power plants – still vital for fueling peak electricity power surges – jacked up everyone’s winter heating bills.

The next logical move, of course, is to do the same for the oil and gas industries, further jacking up heating and cooling costs for middle and lower-class Americans as well as making the price at the pump prohibitively expensive for most normal people. Meaning most of us. And in this, they’ve been successful. One of the few successes, in fact, that this failed, fake administration can claim. Although they won’t spin it that way.

If they can’t freeze us out, they’ll isolate us in place, we’d guess. As we often say, this is a feature, not a bug, of AOC & Co.’s insane “Green New Deal.”

Thanksgiving Week price at the pump may prove just the start of problems for US markets

All of this sent fossil fuel prices soaring this fall. Until last week, when the price of crude oil suddenly dropped upwards of a massive $6 or so per barrel, depending on which measure you prefer. While, predictably, the price at the pump has thus far failed to budge (why forego those massive price increases during the greatest US travel week of the year?), oil extractors and refiners dove just as badly as oil prices last week.

Seems financial analysts “know” that the energy morons in Washington are pushing Resident Biden to pump mass quantities of oil out of our US Petroleum Reserve and into those oil pipelines that remain open. We wonder – if we’re still undersupplied with that commodity, how will this clearly temporary move help out with prices at the pump. Particularly since the Saudis, the Rushkies and others are pretty much refusing to increase consumption to bail the US out.

And why would they, since this administration shot the American consumer in the collective foot anyway when it comes to fuel prices. You know the old adage about giving a dog enough rope….

In and out of oil stocks…

Anyhow, based on all this lunacy, oil prices in particular remained under severe pressure last week, damaging our own rather oil-centric portfolios. We dumped a small position in Norwegian oil giant Equinor (NYSE: EQNR) last week to lighten the load a bit.

But we continue to hold our remaining US-based oil industry positions, particularly those in massively profitable EOG (NYSE: EOG) and robust refiner Valero (NYSE: VLO), both of which got whacked pretty hard late last week. We might not see a bounce in these during the holiday week. But fingers-crossed after that. Even opening the spigots via the Petroleum Reserve won’t make much of a dent in the current high per-barrel price of oil here.

Tech Sector: Trying to recover?

On the other hand, we did see some decent price improvement in the tech sector last week. Many tech and tech-involved companies labored mightily, and actually with some success, to work through their various microchip supply constraints. The shares of Broadcom (NYSE: AVGO) continue to do well for us in this sector. Apple (NASDAQ: AAPL) and Microsoft also (NASDAQ: MSFT) also seem eager to regain their sea legs in this weird market.

Although they would seem to be more comfortable in the tech sector, the shares of Amazon (NASDAQ: AMZN) remain in S&P’s retail sector, another sector that did quite well last week, even given all the chaos that hit most other sectors hard. We continue to hold our tiny position. (These shares are EXPENSIVE!)

Other sectors seem a bit more iffy. Our beloved Cleveland-Cliffs shares (NYSE: CLF) took a beating last week by the usual cadre of relentless shorters and sellers, none of whom seem aware that Cliffs is now far more than just an iron ore mining company. But the shares seemed ready to bounce on Friday, indicating that the current seller assault might be abating. At least for now. A rally in CLF, however, might have to wait until the week after Thanksgiving. Ditto for US markets in general.

Happy Thanksgiving anyway!

These constitute our random thoughts on the week just past and our thoughts on the week about to come. Bottom line: Thanksgiving Week is generally not a big week to either dump stocks or to go fully invested. Trading tends to be light, iffy, and at times, downright wrong, leading to big trading mistakes.

For that reason, our columns will likely be few and far between this week. But we’ll be ready for action after the holiday weekend. That may very well prove true for everyone else as well. So let’s make sure our seatbelts are functional when “normal” Post-Turkey Day trading action resumes.


Link to Branco Cartoon: Via Comically Incorrect.

 

Terry Ponick

Biographical Note: Dateline Award-winning music and theater critic for The Connection Newspapers and the Reston-Fairfax Times, Terry was the music critic for the Washington Times print edition (1994-2010) and online Communities (2010-2014). Since 2014, he has been the Senior Business and Entertainment Editor for Communities Digital News (CDN). A former stockbroker and a writer and editor with many interests, he served as editor under contract from the White House Office of Science and Technology Policy (OSTP) and continues to write on science and business topics. He is a graduate of Georgetown University (BA, MA) and the University of South Carolina where he was awarded a Ph.D. in English and American Literature and co-founded one of the earliest Writing Labs in the country. Twitter: @terryp17