Market Update: March 1, 2022 Oil Jumps And The Market Slumps

Tom Vaughan is a Certified Portfolio Manager and CEO of Retirement Capital Strategies. Retirement Capital Strategies is a registered investment advisor located in San Jose, California.

The opinions voiced in these presentations are for general information only and are not intended to provide specific advice or recommendations for any individual(s). The information provided herein is obtained from sources believed to be reliable, but no reservation or warranty is made as to its accuracy or completeness. Statements and opinions are subject to change without notice. Asset allocation and portfolio diversification cannot assure or guarantee better performance and cannot eliminate the risk of investment losses. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. Accordingly, you should not rely solely on the information contained in these materials in making any investment decision as the material does not take into account your particular investment objectives, financial situation or needs and is not intended as recommendations appropriate for you. You must make an independent decision regarding investments or strategies mentioned in this presentation. Before acting on information discussed in this presentation, you should consider whether it is suitable for your particular circumstances and strongly consider seeking advice from your own financial or investment advisor. Prospectuses, investment objectives, risks, charges and expenses of any investment product should be reviewed carefully before investing. This platform is solely for informational purposes. Advisory services are only offered to clients or prospective clients where Retirement Capital Strategies and its representatives are properly licensed or exempt from licensure. No advice may be rendered by Tom Vaughan or Retirement Capital Strategies unless a client service agreement is in place. “Likes” are not intended to be endorsements of our firm, our advisors or our services. Please be aware that while we monitor comments and “likes” left on this page, we do not endorse or necessarily share the same opinions expressed by site users. While we appreciate your comments and feedback please be aware that any form of testimony from current or past clients about their experience with our firm is strictly forbidden under current securities laws. Please honor our request to limit your posts to industry-related educational information, comments and questions. Third-party rankings and recognitions are no guarantee of future investment success and do not ensure that a client or prospective client will experience a higher level of performance or results. These ratings should not be construed as an endorsement of the advisor by any client nor are they representative of any one client’s evaluation. Investment positions mentioned in these videos may be held in some of our existing portfolios. Tom Vaughan and Retirement Capital Strategies are unaffiliated and separate from those companies whose investment positions are mentioned and is not liable for their products or services.

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Transcript:

Tom Vaughan:

Everybody, welcome to Tuesday, the S&P 500 was down 1.55%. Today, the big story was oil. Let me give you some of the interesting information that’s been happening there. As a world, we use about 100 million barrels of oil a day, Russia produces 10 million barrels. Obviously, there’s a big conflict going on right now. And the question is, how much of Russia’s production would be cut back? That doesn’t disappear completely? Is it two, 3 million barrels a day, what happens there, we do have these very heavy sanctions. But there are carve outs in those sanctions to allow Russia to continue to sell their oil and gas, specifically, because it’s winter, and Europe uses a lot of Russian oil and gas. And so you know how much that drops will be a critical component of this as far as that goes. And so what happened, today’s International Energy Agency released 60 million barrels of oil out of their strategic reserves, 30 million came from the US 30 million came from the rest of the world.

And really, you know, one of the problems with oil has been that it’s kind of tight already, it has come up in price quite a bit prior to this conflict, because the world’s reopening, and a lot of the production of oil was closed down during the pandemic and still catching up and what have you to so it’s a little bit difficult to turn it up a lot. But Saudi Arabia still has, for example, an interest historically in keeping prices in that lower range, maybe in the $80 range. And one of the reasons is because higher cost producers like the US which have higher labor costs, when the price gets high enough, they can all start producing and taking away market share from some of the lower cost producers. So OPEC plus meets tomorrow, I’ll be interesting to see what they do, because I think they would have some desire to keep that price from getting too high. You know, it’s at $104 a barrel roughly, on the after hours, as I saw it up to $106. a barrel very easily will go higher than that before it goes lower, it got to $150 a barrel, for example, in 2007, because it’s going to take a while for this to work its way through. And so oil is important to the economy. That’s a big piece of the inflation picture, we’re dealing with last month’s inflation number seven and a half percent year over year, but in that number energy grew 27% year over year.

So the continuation of the growth and the cost of energy drives that inflation number and the Federal Reserve that has to deal with that. And does that mean that they end up with more rate increases? Hopefully not I you know, we’ll have to see how this goes. As far as that goes, and how, you know, we’re able to kind of overcome the production. But this is just like anything else, there’s a short term, cut back on the supply for whatever reason, and it does take some time to kind of re establish that supply from different sources as far as that goes. So we could see something happening, for example, with Iran, because they’ve been cut off at the world supply and they could come in here too. So but even that would take some significant time. So anyway, that’s what’s happening right now. I still feel fine about the market. You know, we had great motion up on Thursday, Friday, last week, really kind of going sideways at this point in time for the most part and you don’t have to wait and see what goes on. But look forward to seeing you tomorrow and get the chance to see what’s going to happen then. Thank you very much.

Tom Vaughan is a Certified Portfolio Manager and CEO of Retirement Capital Strategies. Retirement Capital Strategies is a registered investment advisor located in San Jose, California.

The opinions voiced in these presentations are for general information only and are not intended to provide specific advice or recommendations for any individual(s). The information provided herein is obtained from sources believed to be reliable, but no reservation or warranty is made as to its accuracy or completeness. Statements and opinions are subject to change without notice. Asset allocation and portfolio diversification cannot assure or guarantee better performance and cannot eliminate the risk of investment losses. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. Accordingly, you should not rely solely on the information contained in these materials in making any investment decision as the material does not take into account your particular investment objectives, financial situation or needs and is not intended as recommendations appropriate for you. You must make an independent decision regarding investments or strategies mentioned in this presentation. Before acting on information discussed in this presentation, you should consider whether it is suitable for your particular circumstances and strongly consider seeking advice from your own financial or investment advisor. Prospectuses, investment objectives, risks, charges and expenses of any investment product should be reviewed carefully before investing. This platform is solely for informational purposes. Advisory services are only offered to clients or prospective clients where Retirement Capital Strategies and its representatives are properly licensed or exempt from licensure. No advice may be rendered by Tom Vaughan or Retirement Capital Strategies unless a client service agreement is in place. “Likes” are not intended to be endorsements of our firm, our advisors or our services. Please be aware that while we monitor comments and “likes” left on this page, we do not endorse or necessarily share the same opinions expressed by site users. While we appreciate your comments and feedback please be aware that any form of testimony from current or past clients about their experience with our firm is strictly forbidden under current securities laws. Please honor our request to limit your posts to industry-related educational information, comments and questions. Third-party rankings and recognitions are no guarantee of future investment success and do not ensure that a client or prospective client will experience a higher level of performance or results. These ratings should not be construed as an endorsement of the advisor by any client nor are they representative of any one client’s evaluation. Investment positions mentioned in these videos may be held in some of our existing portfolios. Tom Vaughan and Retirement Capital Strategies are unaffiliated and separate from those companies whose investment positions are mentioned and is not liable for their products or services.

By participating in any of these live streams, you agree that any questions submitted by you might be used by us in the future on this YouTube channel. We will not share your personal information.

If you have questions, please write to us at: asktom@talkmoneywithtom.com.

  • MoneyGuidePro®
  • Advent Software/Black Diamond Reporting
  • Riskalyze, Inc.
  • thinkpipes®
  • Right Capital
  • YCharts, Inc.