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Markets in the USA are closed today, however, there was no shortage of market moving action overseas.

  • The protests in Libya took a turn for the worse over the weekend as Moammar Gadhafi ordered the killings of hundreds of protesters.  Libya is an OPEC member and accounts for 2% of the world’s daily oil output.  Fears are growing that the turmoil will spread to other countries such as Saudi Arabia and Iran.  While the revolution in the Middle East is a historic movement (and certainly a positive long-term human event) it is likely to cause severe disruptions in the near-term.
  • Oil prices surged 6%+ on the news to $91.40.   Gasoline prices have continued to surge higher in the early portion of 2010 and if seasonal trends hold it would not be surprising to see $4 national gasoline in the USA by this summer.  The recovery would almost will become increasingly fragile in such a scenario as consumers are forced to reallocate their incomes.  The oil cartel continues to wreak havoc on the US economy.  Fortunately, many of our best engineers and mathematicians are working at hedge funds where they are figuring out ways to predict the price movement of oil as oppose to finding the alternatives that could end our dependence on it.
  • European stocks got slammed on the news with the Dax falling 1.4% and the FTSE 100 falling 1.1%.  US equity futures were down 0.93% in a shortened session.  Silver hit a new high of $33.85, up almost 5% while gold rallied 1.3%.

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