How President Biden's symbolic gas tax cut will impact oil markets
Advertisement
Phil Rosen
Jun 23, 2022, 17:41 IST
Biden announces a ban on US imports of Russian oil and gas at the White House on March 8, 2022.Jim Watson/AFP via Getty Images
Top of the morning readers, Phil Rosen here. Yesterday I sat down with the CEO of Doodles — an NFT project of cute sketches that has topped $500 million in sales.
Advertisement
He explained how he's aiming to transform the NFT collection into an entertainment brand, and that Doodles could still hold value through a recession. Get the full scoop in my latest dispatch from the conference.
That said, President Biden is sweating gas prices a lot more than the current crypto bear market.
Let's see what he's planning — and how it impacts oil markets.
Advertisement
1. High prices means Biden wants a holiday — a gas tax holiday, at least.
The White House called on Congress yesterday to suspend the federal gasoline tax, though the move is largely symbolic and comes as prices at the pump weigh on his re-election ambitions and inflation squeezes Americans.
While it's possible that relatively cheaper gas actually fuels more demand — thus pushing prices up even further — oil actually slumped through most of yesterday, falling as much as 7%.
That's because the market is also digesting a wave of recession forecasts that would almost certainly lead to a diminished outlook for oil demand.
As the White House points to war in Ukraine as reason for high gas prices and economic turmoil, the recession alarms continue to ring.
Advertisement
Deutsche Bank's CEO put the odds of a global recession at 50%, and JPMorgan's Jamie Dimon has warned of an impending economic "hurricane."
Wells Fargo chief Charlie Scharf said there was "no question" of a downturn, and Citi also says the odds are high.
"We have the probability of a recession at about 40% going into next year. We wouldn't see that until next year just because the tightening that we're seeing around the Fed generally takes around 12 to 18 months to really show up in economic conditions," a Citi exec said.
Insider finance correspondent Aaron Weinman, who writes 10 things on Wall Street, went on CBS News last night to chat about Biden's gas tax holiday. See the video here.
Advertisement
2. US stocks climbed after closing lower in Wednesday's session, while oil extended its losses. Fed Chair Powell told Congress yesterday that the central bank is "strongly committed" to taming inflation, and said a recession could be a possibility. Powell is slated for more comments today, too. Here is your morning wrap.
3. On deck today: PetroChina Company Limited, FedEx, and BlackBerry, all reporting.
4. Goldman Sachs shared where investors can make the most money when stocks eventually begin their recovery. According to bank analysts, the outlook for stocks will likely brighten toward the end of the year. Here's how they say you can know when the bottom hits.
5. Altria plunged 10% after a report said the FDA will ban Juul vaping products from the US market. Altria paid $12.8 billion for a 35% stake in Juul back in 2018 when the product boomed among teens. Now, Juul's market share of US e-cigarettes has dipped to second place — which could be a boon for other US tobacco manufacturers.
8. These steady-returning stocks can help you profit from an approach that's overlooked but ready to stage a comeback. While the bear market craters share prices, Jefferies says that investors have sold sensibly-priced growth stocks — which puts them in a position to recover after a poor performance.
9. "Super savers" broke down the strategies they use to save more than half their income. If you want to keep more of your paycheck, use these tried and true saving tacts, from house hacking to tracking your spending habits.
NewsletterSIMPLY PUT - where we join the dots to inform and inspire you. Sign up for a weekly brief collating many news items into one untangled thought delivered straight to your mailbox.
US stock futures tick higher as investors assess Powell's recession comments, while oil extends its losses
Investment in coal — the dirtiest fossil fuel — is set to rise 10% this year as energy security grows increasingly fragile due to the Ukraine war
US stocks slip in volatile session as Powell addresses lawmakers on rate hikes and forecast for the economy