Global Markets Recap
Of all the relatively crazy moves we’ve seen in financial markets this year – hello, stocks – perhaps no swings have been more mercurial than those in energy. Only a few weeks back, front-month WTI crude traded negative $12. Every business publication on the planet weighed in on the future of oil prices being less than zero, and how storage would be the new game; the next frontier. This morning July Brent trades $42 a barrel. I wish I had some tremendous insights on what to make of this, but I don’t. Except to say, we don’t have a lot of data points that look like this, and therefore, you have to remain careful, circumspect about comparing COVID-19 to previous crises. Was talking last night after baseball practice with my buddy who trades equity volatility at a big shop in the city, and I asked him how this period compared to the months after Lehman filed for bankruptcy in the fall of 2008. He said the biggest thing missing is the lack of fear. Maybe automation has something to do with this as there are far fewer humans trading nowadays versus a decade ago. But the other noticeable change is the strength of the banking sector. Some $2 trillion got deposited into Wall Street banks since March; a decade ago, banks were almost knocked out. Anyways, energy markets are back to normal.