CNBC's Market Movers For 2011: Stephen Schork On Oil, Gasoline And The Dollar
1. Revolutions in the Middle East: Not Over Yet
With the advent of hedge fund algorithmic trading and retail speculators, word on the street was that OPEC didn’t matter anymore. Well, it turns out the Middle East and Africa still account for over a third of the world’s liquid fuels production, and as the riots in Egypt, Libya and Bahrain show, they can still make the markets move big. The impact of the revolutions is not over yet. At The Schork Report we will be looking for a ‘scorched earth’ policy from the departing parties, and extended infighting as remaining parties scramble for power.
2. The Dollar Strikes Back
The tragedy in Japan had many effects on the markets, but few as stark as the dollar weakening against the yen to a record low of 78.89. Yet the stage is set for the dollar’s return as rumors build about the Fed’s quantitative tightening taking away excess supply. As a dollar- denominated commodity, a higher dollar should mean lower crude prices.
3. Prepare to Pay More
For motorists across the country, prices at the pump have gone from a slight concern to a serious problem. Now the latest Consumer Price Index data shows food prices rising at their fastest pace since 2008. The hope is that wage increases and investments in the equities markets will outpace expenditures, but the high unemployment rate makes for a gloomy picture for many.