March 31, 2022

Biden Taps Strategic Petroleum Reserve

Good evening, everyone. It’s been a crazy week, so trade responsibly! 😉

Equities sold off into the close. The S&P 500 sank 1.57% and the Dow dropped 1.56%. We just closed the worst quarter in the stock market in two years. Ouch.

🎶 1 million barrels of oil on the wall, 1 million barrels of oil! Take one down, pass it around…. 🎶 the Biden Administration will release 1 million barrels of oil per day from the U.S.’s Strategic Petroleum Reserve in an effort to combat rising energy prices. More on this below.

The S&P 500 was a sea of red. Here is today’s heat map:

Every sector closed lower. Financials flopped 2.29%, consumer discretionary dove 1.92%, and communications crumbled 1.88%. 💔

Longeveron shares leaped 105.36% after the company’s successful Phase 1 study results were published related to the treatment of individuals with mild Alzheimer’s disease. $LGVN spent the day trending #1 on Stocktwits. 🧬 Check out the intraday chart:

Bitcoin and Ethereum each fell over 2.5%.

$SABS soared 44.62%, $ICVX climbed 32.08%, and $CPSH hopped 27.07%.

Here are the closing prices:

S&P 500	4,530	-1.57%
Nasdaq	14,220	-1.54%
Russell 2000	2,070	-1.00%
Dow Jones	34,678	-1.56%

What’s Trending? 🔥

GameStop surged 15.4% in extended trading after releasing plans for a stock split. 🤭 The gaming retailer will ask shareholders to approve a proposal to raise the number of Class A shares from 300 million to 1 billion at its upcoming annual meeting for future company demands.

$GME ripped 67.36% last week and is up another 9.63% this week. Here’s the daily chart:

Walgreens Boots Alliance descended 5.67% even after beating earnings and sales expectations. $WBA is down 13.31% YTD.

$WBA | EPS: $1.59 (vs. $1.44 expected) | Revenue: $33.8 billion (vs. $33.65 billion expected) | Link to Report

Lithium Americas Corp performed tremendously in March. 💪 $LAC gained 34.86% in the third month of the year as lithium futures continue drifting higher. The lithium resource company has closed green in three consecutive weeks, so we’ll see if it can add another green day tomorrow. $LAC is now up 32.45% in 2022.

Here’s the daily chart:

And the monthly chart for good measure:

Commodities

Oil Prices Slide After Biden Releases More Strategic Petroleum

Global energy prices have soared throughout Russia’s invasion of Ukraine, largely due to sweeping sanctions barring Western countries from purchasing Russian energy products. 📈 📈

The U.S. has been affected (to a lesser degree) than its neighbors across the pond in Europe. However, with the weight of inflation leaning on average Americans, the Biden Administration has tapped its strategic oil reserve to arrest prices in the near-term. 🛢️

The Biden Admin is now reaching deep: they announced a plan today that will release over a million barrels of oil per day for the next six months. The reason is pretty simple. 💡 It’s a midterm election year. Inflation is bad already, and energy prices staying this high would be tough news for Democrats’ election odds.

The 180 million barrels of oil to be released might go some distance in bringing down sky-high oil prices for average Americans — the massive release has already made an impact in the market. CFDs on WTI Crude Oil dropped 5.8% in trading today, briefly falling below $100. 📉

However, this move’s attempt to reduce energy costs in an effort to lower inflation next month is likely to be unsuccessful. We’re preparing our eyes for the next inflation readout. 😪 But first, let’s chat about what inflation is doing to consumer spending…

Economy

Inflation Reduces Consumer Spending Growth

As inflation goes higher, consumer spending seems to be contracting. At least, that’s the takeaway from this month’s consumer spending report, which showed that U.S. householders only spent 0.2% MoM.

That figure is a far cry from its 2.7% MoM change in January, when broad reopening measures helped the economy back onto its feet. Since then, things have been looking up and to the right for the U.S. economy (besides the very obvious and insane war taking place in Europe.)

However, the Ukraine-Russian conflict is exacerbating inflationary woes… 📈 mostly by causing meaningful increases in energy costs. Naturally, those increased costs result in higher inflation. That’s one reason why income after taxes, adjusted for inflation, fell for the seventh straight month.

All of these factors could continue to affect consumer spending growth, and consequently, economic growth. In other words, higher inflation + reduced consumer spending is a recipe for greater odds for an economic recession (something which investors are already concerned about in the intermediate term.)

Bullets

Bullets from the Day

🧬 Scientists say they have finished the first complete map of a human genome. A robust understanding of the gapless human genome is necessary to learn more about the nature of certain diseases, cancer, birth defects, aging, and the treatment of these ailments, according to the Wall Street Journal. The latest completed genome map successfully uncovers 99 new genes and names 2,000 other genes whose purpose is unknown. Columbia geneticist Wendy Chung shared “We have patients with diseases that we know are genetic but we haven’t been able to identify. I hope this map will help us fill in some of the gaps in our knowledge.”

🏡 Average 30-year mortgage rates have hiked again. The rate for a 30-year fixed-rate loan increased to 4.67% yesterday from 4.42% on Thursday, March 24. Surging interest rates have historically deterred home buying, but the Mortgage Bankers Association shared that applications from home buyers have increased over the last month. Read more in WSJ.

💰 Americans are neglecting their retirement savings. Only 17% of adults say that saving for retirement is their priority right now, according to a study conducted by the First National Bank of Omaha. 46% of American adults who were surveyed have less than $15,000 saved for retirement (1,000 adults were surveyed in total.) A PwC survey indicated that 25% of American adults have no retirement savings. Instead, respondents said they’re focusing on increasing their non-retirement savings. Here’s CNBC with more.

⚖️ Florida Gov. Ron DeSantis could revoke major legislation for Disney World operations in Florida. As the turmoil between Disney and the state of Florida persists over the signed “Parental Rights in Education” (aka “Don’t Say Gay” bill) law, Gov. Ron DeSantis is considering revoking the 1967 Reedy Creek Improvement Act which authorizes Disney World to operate like its own government. DeSantis says that he doesn’t want Disney to have “special privileges” in the state.