Carbone said the demand story in diesel is important because if the economy picks up, more trucks will hit the road and diesel demand will improve, supporting higher prices. "We saw draw downs in the distillate inventories this week, bigger than expected. If that continues to happen, that's going to give some momentum and propel the market higher on the demand issue alone. The last time we were at $1.50 to the euro, oil was a lot higher than $75. We were on our way to $147, and that was late spring, 2008."
Jim Paulsen, chief investment strategist at Wells Capital Management, said he thinks rising oil is starting to be a concern, and if it continues to rise it could crimp household spending.
"I don't think it'd be real problematic unless oil zooms to $100, but the problem I have with it is I think one of the biggest contributing factors to the whole crisis was oil doing what it did," (when it moved close to $150), he said. Paulsen said he studied Fed data on households and found the rapid rise in energy costs was a worse increased cost for consumers percentage-wise than debt service.
"I think the thing that really shut the households down was oil going close to $150. It rose substantially more as a percent of disposable income than did the debt service of households. Debt service is a higher percentage, but the changes from a few years earlier was much more dramatic in the energy burden," he said.
Companies reporting in the coming week include Apple, Texas Instruments, Boston Scientific and Gannett Monday. Caterpillar, Coca-Cola, DuPont, Pfizer, United Technologies, Black Rock, Coach, Lockheed Martin, UAL, Parker-Hannifin, Yahoo and United Health release results Tuesday.
On Wednesday, Boeing, EliLilly, Wells Fargo, Continental Air, Morgan Stanley, Amgen, and eBay report. AT&T, Merck, 3M, Travelers, UPS, Bristol-Myers, American Express and McDonald's are among the highlights Thursday. Microsoft, Schlumberger, Whirlpool and Honeywell report Friday.
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