Yesterday, oil prices marked their sharpest one-day decline since February, following the markets as a whole.
By 2:30 P.M. Eastern, the West Texas Intermediate (WTI) had dropped 3% for the day, while Brent was down 2.3%.
Before Monday’s drop, both WTI and Brent were in the middle of an impressive rally – WTI had been up 6.5% for the month as of Thursday, while Brent had been up an even heftier 8.6% for the same period
And when we look at oil prices for the year, both are now at the pricing ranges I had predicted for the end of June.
So a pullback was certainly in order.
Yet, that’s not what happened yesterday.
None of the factors normally associated with a profit-taking environment – a spike in U.S. production, s decline in demand, a rise in surplus stock, or a significant rise in the value of the dollar – was present.
This was not a market-driven excuse for a selloff.
This one came directly from the White House.
Trump’s Tweets Tears the Markets
The markets tanked on Monday with all indices declining over 2%.
Leading the move down was Amazon.com Inc. (AMZN), the target of a Presidential twitter storm, which was down nearly 11% since the open.
As the latest personal controversy President Donald Trump has engineered with a critic – this one with Amazon CEO (and owner of the Washington Post) Jeff Bezos – attests, these attacks have broader consequences.
Trump’s argument that Amazon is cheating the Postal Service and the U.S. Treasury out of “billions” in revenue is neither accurate or a matter susceptible to executive action.
That differentiates the issue from tariffs, where the President does have a recourse to direct action from the Oval Office.
Nonetheless, both moves have had a negative impact on markets.
Traders now have to factor in the prospect of an escalating, tariff-fueled trade war on the one hand and attacks against high-profile stocks on the other.
