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Tag: Oil Industry

  • Ukrainian security chief says 160 Russian oil facilities attacked

    Ukraine has attacked approximately 160 refineries, pumping stations and other facilities of the Russian oil industry since the beginning of the year, Ukrainian security service chief Vasyl Malyuk said on Friday.

    In September and October, 20 facilities were attacked, the head of the SBU intelligence service said in Kiev. “These include six oil refineries, two oil terminals, three oil depots and nine oil pumping stations,” Malyuk was quoted as saying by the news agency Interfax-Ukraine.

    According to Malyuk’s estimates, the Russian market is short of about one-fifth of the oil products it needs. He said that the oil-processing capacities have been reduced by 37%.

    Calculations by experts in the oil industry also arrive at approximately the same figures.

    Malyuk said that Ukraine targets the Russian oil economy because it finances the lion’s share of the Russian defence budget.

    Meanwhile, Ukrainian President Volodymyr Zelensky called for sanctions on a further 340 tankers of the so-called shadow fleet. The ships are used to export Russian oil while circumventing existing restrictions. Zelensky estimated that Russia could have a total of over 1,500 such ships under various flags.

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  • Newsom calls Legislature into special session after lawmakers reject his latest salvo at Big Oil

    Newsom calls Legislature into special session after lawmakers reject his latest salvo at Big Oil

    SACRAMENTO — 

    Gov. Gavin Newsom called California lawmakers into a special session Saturday after Assembly Democrats pushed back on his request to approve new requirements on oil refineries in the final days of the regular legislative session that ends Saturday night.

    The unusual maneuver effectively pushes the Legislature into overtime to address the complex and politically sensitive issue of energy affordability just as campaign season heats up in advance of the Nov. 5 election.

    Newsom’s order requires that lawmakers formally open a special session immediately, but it’s unclear when they plan to hold hearings to consider the bills or how long the session will go. Lawmakers were scheduled to leave Sacramento this weekend for four months in their home districts.

    “It should be common sense for gas refineries to plan ahead and backfill supplies when they go down for maintenance to avoid price spikes. But these price spikes are actually profit spikes for Big Oil, and they’re using the same old scare tactics to maintain the status quo,” Newsom said in a statement.

    “Calling the session now allows the Legislature to begin that work immediately so that the state can resolve this important matter to establish the necessary rules to prevent price spikes next year and beyond.”

    It’s the second time in two years that Newsom has called a special session focused on the economics of the oil industry, an issue that divides Democrats as they navigate a desire to fight climate change with ambitions to lower prices at the pump. Newsom has blamed high gas prices on the industry, which he accused of gouging consumers. Oil companies point to the state’s climate change and tax policies as drivers of higher prices.

    Two weeks ago, Newsom announced a proposal to require that petroleum refiners maintain a stable inventory in order to prevent fuel shortages and price spikes when refinery equipment is taken offline for maintenance.

    As the oil industry lobbied heavily against the proposal, Democrats in the Assembly and Senate squabbled over how to move forward. Lawmakers said they were frustrated with Newsom’s attempt to push the plan through the Capitol at the last minute.

    In a statement Friday, Assembly Speaker Robert Rivas (D-Hollister) said his caucus agreed with the governor about the need to urgently address affordability and would deliver results if a special session was called. But he refused to take up the bills for a floor vote by Saturday’s deadline.

    “What I’m not going to do is push through bills that haven’t been sufficiently vetted with public hearings,” Rivas said. “Doing so could lead to unintended consequences on Californians’ pocketbooks.”

    Assembly Speaker Robert Rivas said he wouldn’t rush Newsom’s energy proposal through the Legislature.

    (Rich Pedroncelli / Associated Press)

    Newsom’s office began talking with the Senate and Assembly earlier this summer about legislation that would allow his administration to require that petroleum refiners maintain a stable inventory in order to prevent fuel shortages in California.

    After gathering more insight about pricing from laws passed in a previous special session on oil that ended last year, state regulators had reported that charges at the pump increase when the oil companies do not maintain enough refined gasoline to backfill production shortfalls or protect against the impact of unplanned maintenance.

    Western States Petroleum Assn. leaders said the governor’s refinery proposal will drive up fuel costs in California and reduce supplies in Arizona and Nevada. The argument raised a potent political concern that the state policy could become a national headache for Vice President Kamala Harris and other Democrats in a critical election year.

    “It’s noteworthy that legislators are considering such radical energy policies at a time when the nation is closely examining how the ‘California model’ will impact their families and pocketbooks,” Catherine Reheis-Boyd, CEO of the Western States Petroleum Assn., said in a statement this week.

    The warning from WSPA, Chevron and other industry players spooked Assembly Democrats, who were also irked by the late introduction of the proposal.

    In an effort to reach an agreement with Democratic lawmakers, the proposal was tied together with other bills in the Senate and Assembly during negotiations with leaders of both houses. But environmentalists opposed some of those proposals, leaving Democrats with a suite of bills that angered both ends of the environmental policy spectrum.

    One of the Assembly bills, which would cut energy and climate programs that fund HVAC improvements in schools, installation of energy storage and generation technologies in vulnerable communities and solar energy systems on multifamily affordable housing to achieve a meager one-time customer credit on electricity and gas bills, drew sweeping opposition from a coalition of environmental, education, housing and energy groups. Another bill, which ratepayer advocates supported, would have required the Public Utilities Commission to develop a framework for analyzing total annual energy costs for residential households.

    The bills didn’t offer enough incentive for Assembly Democrats to slam the plan through this week. They also soured on efforts by Senate President Pro Tem Mike McGuire (D-Healdsburg) to leverage the moment to pass Senate bills that would accelerate environmental reviews for clean energy and hydrogen projects, save ratepayers money by lowering requirements for utility wildfire mitigation plans and make it harder for companies to terminate utility service to customers.

    McGuire, who earlier this week said the Senate did not support a special session and urged the Assembly to take action on the bills, stuck to that position on Saturday.

    “The Senate always had the votes and was ready to get these important measures across the finish line this legislative year and deliver the relief Californians need at the pump and on their electricity bills,” McGuire said in a statement.

    “We won’t be convening a special session this fall, but we look forward to continuing conversations with the Governor and Speaker about this critical issue in the days and weeks to come.”

    It was unclear Saturday night how Newsom would respond or whether the Senate leader has the legal authority to refuse the governor’s call for a special session.

    The drama marked another effort by a governor on the cusp of the final two years of his second term to push last-minute bills through a Legislature guided by two new leaders. Earlier this summer lawmakers similarly balked on passing a bill that would have placed his measure targeting retail crime on the ballot.

    Newsom’s decision to call for a special session also marks the second time he’s sought to toughen California’s oil laws outside the typical two-year process to hear bills, which runs from January through August or mid-September each year.

    The governor called a special session two years ago to penalize oil companies for excessive profits as gasoline prices spiked. But lawmakers were ultimately reluctant to adopt a penalty and Newsom refined his request to instead demand more transparency from the industry.

    Instead of enacting a cap and penalty on oil refinery profits, Newsom and lawmakers gave state regulators the ability to do so in the future. Consumer advocates and the governor celebrated the resulting law as a groundbreaking tool that could keep gas prices from escalating.

    But Republican Gov. Joe Lombardo of Nevada joined the industry and his party in May when he sent Newsom a letter warning a cap could “further raise gas prices for both of our constituencies” because his state’s gas largely comes from refineries in California.

    On Friday, Andy Walz, president of Americas products for Chevron, sent a letter to the California Energy Commission saying that Newsom’s new refinery proposal “risks the safety of refinery operations, the orderly functioning of markets and would leave industry and labor experts without a voice in key policies.”

    “The physical, operational and cost burdens to sustain unnecessary inventory are also a concern,” he wrote. “Building just one new storage tank can take a decade and cost $35 million. These costs would likely be passed onto the consumer. And given the current regulatory regime, with constraints on permits and a gasoline vehicle sales ban, there is no opportunity to recover capital invested to build additional tanks, which could be the ‘last straw’ for the state’s energy market investors.”

    The timing of a second special session on oil regulations could work in Newsom’s favor if lawmakers immediately get to work.

    Newsom will finish signing the bills on his desk by Sept. 30, which means he could have the political upper hand if the special session begins before that period concludes. If the special session begins after bill signing, the governor could lose some of that leverage.

    But when, and, if, they ultimately pass new mandates on the oil industry or lower electricity bills could also affect the election.

    Legislation that saves consumers money could give them something to tout to their constituents. Laws that potentially raise gas prices could be weaponized in California races or national contests.

    Taryn Luna, Laurel Rosenhall

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  • Don’t have a college education and want to make bank and take half the year off? Oil rig work is the hot job for many Americans

    Don’t have a college education and want to make bank and take half the year off? Oil rig work is the hot job for many Americans

    Not many on-the-ground jobs  that offer a salary over $55,000 for just half a year’s work. But that’s the money for those who opt for the rigor of an oil rig,  a hot topic on people’s tongues this week. 

    According to Google, interest in oil rig jobs is having a moment. Searches for oil rig work reached a five-year high, surging particularly especially in the southern states of Mississippi, Alabama, Texas and Arkansas, which abut the Gulf of Mexico and its 6,000-plus oil and gas structures, or rigs. A few reasons help explain why more people want in on the job despite deadly on-the-clock risks and increased environmental pollution. 

    Good money; no college required

    According to research on the impact of oil and gas job opportunities, most jobs in the industry pay well, especially for those who don’t have college degrees. Entry-level oil work only requires a high school diploma or equivalent, which could be tempting for more than half of all Americans over age 25 who don’t have a college degree. Starting salaries average $55,000 per year, according to ZipRecruiter, while those in management positions could pocket well over $100,000 per year, according to oil industry law firm Arnold & Itkin.

    According to Amanda Chuan, a professor in labor relations at Michigan State University, the attractive starting pay especially entices college-aged young men, who account for about 20% of the workforce, and are increasingly facing decisions between enrolling in school and risking years of debt and taking a high starting salary that they could pocket much sooner.  

    “These are jobs that don’t require a lot of cognizant skill, but you’re paid a lot for the long shifts, living in a camp, being away from home, chemical exposure and high risk of injury,” she said. “It’s extremely exhausting, mentally draining and a lot of people are not willing to do it—so if you are, you’ll make a lot.” It’s a concept called compensating wage differentials, Chuan explained—essentially, paying more for less-desirable work. 

    Oil rig workers also face pollution hazards, according to the U.S Department of Labor,  due to spending a lot of time in confined spaces. Petroleum storage tanks, mud pits, reserve pits and other spaces around an oil wellhead can all come with more exposure to chemicals, flammable vapors or gasses that could cause workers to suffocate. 

    The cost-of-living crisis, though, is making more people willing to take on the back-breaking work (and fatal risks) of rigs. 

    According to a report by the nonprofit National Low Income Housing Coalition, renters nationwide are struggling to afford housing, with the lowest-income residents in states like Arizona, Texas and Florida most worried about affording housing. 

    Boom-bust nature of the industry

    Another reason for more labor interest in rigs is just the “boom-bust” nature of the oil industry. During booms, periods of high demand for oil, investors pour in and trigger overproduction, according to the Colorado School of Mines. Busts follow the overproduction, which see lower prices for oil and under-investment by the industry. The bust period of lower prices then triggers more demand for cheap oil, which shifts the price higher again and the cycle continues. 

    The current boom that finds oil rig workers in hot demand right now is in part due to global wars, like the invasion of Ukraine and the siege on Gaza, which means the country can’t rely on as much oil coming in. “Because our usual supplies for energy are being cut short right now,” Chuan said, “the country is turning more to domestic production of oil.” 

    The boom-bust nature of the industry also affects changes in labor demand, she said, as “during booms, newspapers report thousands of new high-paying jobs,” but “during busts, many jobs vanish, potentially leaving thousands unemployed.” Several such layoffs have occurred as the industry cycles through its high and lower value periods, with 2014 and 2020 as some of the biggest years for bust-fueled layoffs.

    Chuan explained that the high starting pays and long vacations are meant to compensate for the risks people assume on the job. For younger workers, the particular risk is that “it leads you away from investing in your human capital, or education and transferable skills, that could help you find future employment that does not depend on the boom-bust cycle.”  

    Half a year of PTO—but 12-hour days 

    According to Arnold & Itkin’s blog post, many workers face shifts of 14 days on the clock, 21 days off. That  means they work for full-day shifts, which can be up to 12 hours long and include night shifts, for two straight weeks. Then they are rewarded with three weeks off. For those who work on offshore rig sites, “two straight weeks at sea can be a harrowing experience for many, although some rigs are equipped with impressive living quarters for the crew.” 

    Living quarters can include “an onsite gym, theater, indoor sports facilities, computers, and more to occupy the time,” the blog says. That can be essential, as many people are not able to return home on their off time due to travel expenses and logistics and end up staying “on the rig the entire time.” 

    What would you do on the oil rigs, and what do you risk? 

    According to Indeed, an oil rig worker’s main responsibility is to extract, store and process oil—relying on lots of equipment. They find themselves at the helms of drills, cranes, forklifts and more to guide pipes into drilling wells. They gain an understanding of chemical levels to prevent the pipes from corroding and track environmental changes that could affect drilling productivity. 

    On risks, Arnold & Itkin states that oil rig crews experience some of the highest rates of injuries and fatalities in the country. 2008 was a particularly deadly year, with 120 oil and gas workers killed on the job. According to the Centers for Disease Control and Prevention, 470 oil workers died between 2014 and 2019, over 400 of them on the job and 69 of them from cardiac complications. The death rate has also been increasing: In 2019, the rate of oil worker fatalities was about 12%, compared to about 6% in 2017.  

    The most common causes of injuries include fires, falls, fatigue, machinery malfunctions, and lack of safety culture on rigs, according to Arnold & Itkin. In one Reddit thread, nearly 100 users shared their most terrifying experiences on oil rigs—describing brutal burns, equipment that maimed people, and witnessing entire coastlines degrade quickly. 

    According to several studies, marine ecosystems and communities who live near waters with rigs face threats from water contamination and dying sea animals. Especially dangerous are seismic airguns, which are towed behind ships and used to shoot blasts of compressed air which are 100,000 times more intense than jet engines, to find oil trapped deep underneath the ocean floor. According to Oceana, an international organization that researches oceans, these blasts are repeated about 6 times a minute almost all day at oil rigs for weeks at a time, and can kill marine animals like sea turtles and fish. 

    Sunny Nagpaul

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  • Here’s how to play oil-industry stocks for long-term growth of 20% or more

    Here’s how to play oil-industry stocks for long-term growth of 20% or more

    Oil demand is likely to hold up longer than many people expect during the anticipated transition to electric vehicles. And changes in the industry point to oilfield services companies as good long-term growth investments as offshore production ramps up.

    Below is a list of oil producers and related companies favored by two analysts who have followed the industry for decades.

    U.S….

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  • Icahn Enterprises’ stock choppy as company moves earnings release to next week

    Icahn Enterprises’ stock choppy as company moves earnings release to next week

    Trading in shares of Icahn Enterprises LP was choppy Thursday amid the continued fallout from a short seller’s report that was critical of the investment arm of activist investor Carl Icahn.

    The stock IEP was moving between gains and losses, but has lost 36% of its value and $6.5 billion of market cap this week in the wake of the report, which accused Icahn Enterprises of inflating its value. On Wednesday, the company said it is moving the release of first-quarter earnings to before market open on May 10. The earnings were…

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  • Icahn Enterprises sheds $4.5 billion of value as short seller Hindenburg puts Carl Icahn’s company in crosshairs

    Icahn Enterprises sheds $4.5 billion of value as short seller Hindenburg puts Carl Icahn’s company in crosshairs

    Icahn Enterprises LP stock tumbled 25% Tuesday to put it on track for a record one-day decline, after short seller Hindenburg Research issued a negative report against the investment arm of activist investor Carl Icahn.

    The stock’s previous one-day record decline was a loss of 19.5% on Nov. 20, 2008. The market cap loss today is about $4.48 billion.

    Icahn…

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  • 10 dividend stocks yielding at least 4.5% that are rated ‘buy’ by most analysts

    10 dividend stocks yielding at least 4.5% that are rated ‘buy’ by most analysts

    During a period of high interest rates, it might be more difficult to impress investors with dividend stocks. But the stocks can have an important advantage over the long term. The dividend payouts can increase over the years, helping to push share prices higher over time.

    When considering stocks for dividend income, yield shouldn’t be the only thing you consider. If a stock’s price has tumbled because investors are worried about the company’s business prospects, the dividend yield might be very high. A double-digit yield might mean investors expect to see a cut to the dividend soon.

    There are many ways to look at companies’ expected ability to maintain or raise their dividend payouts. But one can also take a simple approach to begin researching stock choices.

    At the moment, you can get a bank CD with a yield of close to 5% pretty easily. Here’s a look at current yields for CDs and U.S. Treasury securities and an approach for laddering them not only to protect your cash but to hedge against interest-rate risk.

    For investors who would rather aim for long-term growth to go along with dividend income, or take a relatively conservative approach to growth while reinvesting dividends, a screen of stocks in the S&P 500
    SPX,
    +0.33%
    produces only 10 stocks with dividend yields of 4.5% or higher with majority “buy” or equivalent ratings among analysts polled by FactSet. Here they are, sorted by dividend yield:

    Company

    		 Ticker

    		 Dividend Yield

    		 Expected payout increase through 2025

    		 Share “buy” ratings

    		 April 16 price

    		 Consensus price target

    		 implied 12-month upside potential
    Comerica Inc.

    		 CMA,
    +4.00%         		6.56%

    		 10%

    		 58%

    		 $43.30

    		 $60.53

    		 40%
    Citizens Financial Group Inc.

    		 CFG,
    +4.19%         		5.77%

    		 12%

    		 74%

    		 $29.10

    		 $39.29

    		 35%
    Healthpeak Properties Inc.

    		 PEAK,
    +2.33%         		5.71%

    		 9%

    		 60%

    		 $21.01

    		 $27.69

    		 32%
    Hasbro Inc.

    		 HAS,
    +1.28%         		5.34%

    		 8%

    		 69%

    		 $52.40

    		 $69.27

    		 32%
    Philip Morris International Inc.

    		 PM,
    +0.46%         		5.11%

    		 11%

    		 67%

    		 $99.48

    		 $113.56

    		 14%
    Realty Income Corp.

    		 O,
    +1.30%         		5.04%

    		 7%

    		 56%

    		 $60.77

    		 $70.00

    		 15%
    Fifth Third Bancorp

    		 FITB,
    +3.33%         		4.99%

    		 3%

    		 72%

    		 $26.44

    		 $34.55

    		 31%
    VICI Properties Inc.

    		 VICI,
    +1.58%         		4.82%

    		 12%

    		 95%

    		 $32.35

    		 $37.73

    		 17%
    Organon & Co.

    		 OGN,
    +1.01%         		4.71%

    		 5%

    		 55%

    		 $23.80

    		 $31.89

    		 34%
    Iron Mountain Inc.

    		 IRM,
    +0.82%         		4.69%

    		 15%

    		 78%

    		 $52.76

    		 $56.00

    		 6%
    Source: FactSet

    Click on the ticker for more about each company.

    Click here for Tomi Kilgore’s detailed guide to the wealth of information available for free on the MarketWatch quote page.

    The dividend yields for this group of 10 companies are based on current annual regular payout rates, with all paying quarterly except for Realty Income Corp.
    O,
    +1.30%    ,
    which pays monthly.

    These two oil and natural gas producers would have passed the above screen based on their most recent dividend payments and analysts’ sentiment, however, they pay a combined fixed-plus-variable dividend every quarter, with the fixed portion relatively low:

    • Shares of Pioneer Natural Resources Co.
      PXD,
      -0.77%
      closed at $230 on April 14. Among analysts polled by FactSet, 59% rate the stock a “buy” or the equivalent, and the consensus price target is $257.42. The company pays a fixed quarterly dividend of $1.10 a share, which would make for a dividend yield of only 1.91%. However, the most recent variable quarterly dividend was $4.48 a share, for a combined quarterly dividend of $5.58, which would translate to an annualized dividend yield of 9.70%. The consensus estimate for dividends in 2025 is $4.63 — the analysts are only estimating the fixed portion of the dividend. Pioneer has held preliminary merger discussions with Exxon Corp.
      XOM,
      -1.16%      ,
      according to a Wall Street Journal report.

    • Devon Energy Corp.’s
      DVN,
      -0.72%
      stock closed at $55.70 on April 14. The shares are rated “buy” or the equivalent by 55% of analysts and the consensus price target is $67.66. The fixed portion of Devon’s quarterly dividend is 20 cents a share, for an annualized dividend yield of 1.44%. The variable portion of the most recent quarterly dividend was 69 cents a share. The total payout of 89 cents would make for an annual dividend yield of 6.39%. Analysts expect the fixed portion of annual dividends to total $3.61 in 2025, according to FactSet.

    Don’t miss: Buffett is buying in Japan. This overseas value-stock fund is also making bets there. Is it a good way to diversify?

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  • Saudi Arabia, U.A.E. Scoop Up Russian Oil Products at Steep Discounts

    Saudi Arabia, U.A.E. Scoop Up Russian Oil Products at Steep Discounts

    Saudi Arabia, U.A.E. Scoop Up Russian Oil Products at Steep Discounts

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  • ExxonMobil: Eyes on the Permian Prize

    ExxonMobil: Eyes on the Permian Prize

    ExxonMobil: Eyes on the Permian Prize

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  • 14 dividend stocks yielding 4% or more that are expected to increase payouts in 2023 and 2024

    14 dividend stocks yielding 4% or more that are expected to increase payouts in 2023 and 2024

    If you invest in dividend stocks, you are probably looking for long-term growth to go with the income. Otherwise you might be content to hold one-month U.S. Treasury bills, which yield 4.5% or park your money in an online savings account for a yield close to 4%.

    Below is screen of stocks with current dividend yields ranging from 4.14% to 8.46%. What sets these apart from other stocks with high dividend yields is that their payout increases are expected to accelerate in 2023 and 2024 from those in 2022.

    On Tuesday, S&P Dow Jones Indices said in a press release that it expected dividend payments by publicly traded U.S. companies to continue to hit record levels in 2023. But Howard Silverblatt, a senior index analyst with the firm, said that the pace of dividend increases in the first quarter had slowed and that he expected this year’s increases to be “at half the pace of the double-digit 2022 growth.”

    Silverblatt also said current events in the banking industry were “expected to negatively impact future spending from both consumers and companies, which in turn may curtail corporate dividend growth.”

    For many banks, there’s another big item on the table. A focus on share buybacks in recent years is very likely to end — this is a use of cash that can raise earnings per share if the share count is reduced, but there can be consequences, especially after a year of rising interest rates that pushed down the market value of banks’ investments in bonds.

    In a note to clients on March 16, Dick Bove, a senior research analyst with Odeon Capital, predicted that stock repurchases in the banking industry would be “meaningfully cut back if not flat out eliminated.” He made three general points about buybacks in the banking industry:

    • Buybacks remove working capital that would otherwise provide returns to a bank.

    • Buybacks mean a bank’s board of directors is “in favor of flat-out giving capital away to investors that want nothing to do with the bank — they are selling its stock.”

    • Buybacks do “nothing to increase bank stock prices – many bank stocks are selling at below their prices of five years ago.”

    A company might find it much easier to curtail or stop buying back shares to preserve cash than it is to cut regular dividends. Preserving and increasing the dividend over time has been correlated with good performance for stocks over time. These articles provide examples of how dividend compounding is correlated with long-term growth as income streams build up:

    Dividend stock screen

    The S&P Dow Jones Indices report raises the question of which stocks might buck the trend.

    Starting with the S&P 500
    SPX,
    -0.50%    ,
    there are 71 companies stocks with current dividend yields of at least 4.00% indicated by annual payout rates. Among these companies, 68 increased dividends during 2022, according to data provided by FactSet.

    Then we looked at the pace of dividend increases in 2022 and the consensus estimates for dividends paid during 2023 and 2024, among analysts polled by FactSet. Among the remaining 68 companies, there are 29 for which the estimated 2023 dividend increase is higher than the 2022 dividend increase. Narrowing further, there are 14 for which the estimated 2024 dividend increases are higher than the estimated 2023 dividend increases.

    Here are the 14 stocks that passed the screen, sorted by current dividend yield:

    Company

    		 Ticker

    		 Dividend yield

    		 Dividend increase – 2022

    		 Expected dividend increase in 2023

    		 Expected dividend increase in 2024
    Altria Group Inc.

    		 MO,
    +0.27%         		8.46%

    		 4.5%

    		 4.7%

    		 4.9%
    Newell Brands Inc.

    		 NWL,
    -1.19%         		7.55%

    		 0.0%

    		 0.1%

    		 0.6%
    Boston Properties Inc.

    		 BXP,
    -0.94%         		7.42%

    		 0.0%

    		 0.7%

    		 1.0%
    KeyCorp

    		 KEY,
    -2.22%         		6.99%

    		 5.3%

    		 6.7%

    		 6.8%
    Prudential Financial Inc.

    		 PRU,
    +0.17%         		6.08%

    		 4.3%

    		 4.7%

    		 4.8%
    ONEOK Inc.

    		 OKE,
    +0.60%         		5.87%

    		 0.0%

    		 2.2%

    		 2.4%
    Healthpeak Properties Inc.

    		 PEAK,
    -0.32%         		5.54%

    		 0.0%

    		 2.1%

    		 2.2%
    Dow Inc.

    		 DOW,
    -0.53%         		5.16%

    		 0.0%

    		 1.1%

    		 2.2%
    Iron Mountain Inc.

    		 IRM,
    -1.00%         		4.70%

    		 0.0%

    		 1.8%

    		 5.4%
    NRG Energy Inc.

    		 NRG,
    +1.34%         		4.50%

    		 7.7%

    		 7.9%

    		 7.9%
    Franklin Resources Inc.

    		 BEN,
    -0.58%         		4.50%

    		 3.6%

    		 4.3%

    		 5.7%
    Federal Realty Investment Trust

    		 FRT,
    -0.53%         		4.38%

    		 0.9%

    		 1.7%

    		 2.1%
    Ventas Inc.

    		 VTR,
    -0.57%         		4.26%

    		 0.0%

    		 3.3%

    		 5.5%
    Kraft Heinz Co.

    		 KHC,
    +1.42%         		4.14%

    		 0.0%

    		 0.7%

    		 0.8%
    Source: FactSet

    Click on the ticker for more about each company.

    Click here for Tomi Kilgore’s detailed guide to the wealth of information available for free on the MarketWatch quote page.

    Any stock screen is limited, but can be useful as a starting point or supplement to your own research. If you see any companies of interest, do some research to form your own opinion of how likely they are to remain competitive over the next decade, at least.

    Don’t miss: This stock ETF keeps beating the S&P 500 by selecting for quality

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  • Soaring oil prices: 6 things investors need to know about the surprise OPEC+ production cuts

    Soaring oil prices: 6 things investors need to know about the surprise OPEC+ production cuts

    The Organization of the Petroleum Exporting Countries and its allies said they decided Sunday to cut production in an effort to support oil-market stability, but that offers little comfort to consumers worried about inflation and an expected spike in fuel demand during the coming summer driving season.

    The surprise output reduction by the group known as OPEC+ starting in May also comes at a particularly vulnerable time for the U.S., which may not be able to quickly increase its own production.

    “The nature and timing of the decision are shocking, since prices have been only moderate pressured from the banking mini-crisis and the market is expected to tighten later this year,” said Michael Lynch, president of Strategic Energy & Economic Research.

    “OPEC+, and especially the Saudis, seem to be signaling a strong desire to punish short sellers and pre-empt possible demand weakness,” he told MarketWatch. Also, “the impact on inflation…could mean an anemic summer driving season.”

    What happened?

    OPEC and its allies, a group known as OPEC+, announced voluntary production “adjustments” on Sunday that will take effect starting in May and run through to the end of the year.

    The move was unusual, as there was no indication that any change to production would be made and OPEC+ ministers weren’t scheduled to officially hold an output decision-making meeting until June 4.

    The OPEC+ Joint Ministerial Monitoring Committee, however, did hold a meeting on Monday, as it does every two months. The committee has no ability to make decisions on production, but has the authority to request an OPEC and non-OPEC ministerial meeting at any time to address market developments.

    The JMMC had been expected to discuss a number of oil-market issues, and confirm that previously announced cuts of 2 million barrels a day would remain in effect. The committee on Monday indeed reaffirmed its commitment to that previous agreement, but also pointed out Sunday’s announcement.

    “Unlike cuts in the past that were more ‘paper cuts’ to quotas with many countries already producing below quota, these are real voluntary cuts from countries producing at or above quotas,” said Rebecca Babin, senior energy trader at CIBC Private Wealth U.S., in emailed commentary. That means this will be “far more impactful than the 2 million barrels cut” announced in October 2022.

    Saudi Arabia will take on the biggest reduction, cutting oil output by 500,000 barrels a day. Other barrel-per-day cuts include Iraq with 211,000, United Arab Emirates 144,000, Kuwait 128,000, Kazakhstan 78,000, Algeria 48,000, Oman 40,000 and Gabon 8,000. Those total 1.157 million barrels a day.

    The cuts, however, are in addition to the previous OPEC+ production cuts of 2 million barrels a day, as well as the extension of Russia’s reduction of 500,000 barrels a day in retaliation to western oil-price caps and sanctions. That brings the total output reductions to 3.657 million barrels a day.

    What prompted the cut?

    Saudi Arabia’s Ministry of Energy on Sunday, as well as the JMMC in a statement Monday, said that the cuts are a “precautionary measure aimed at supporting the stability of the oil market.”

    Some news reports and analysts have speculated that Saudi Arabia, a member of OPEC and among the world’s top oil producers, and other major oil producers made the surprise move to cut output because of recent comments made by U.S. Energy Secretary Jennifer Granholm.

    Read: Trigger for Saudi oil production move was comment that U.S. would not refill SPR this year, report says

    On March 23, Granholm said that it may take years for the U.S. to refill its Strategic Petroleum Reserve. She appeared to walk back those comments on March 28, with Reuters reporting that she said the U.S. could start buying back crude oil for the SPR late this year.

    The Biden administration last year announced the emergency sale of 180 million barrels of SPR crude to help lower gasoline prices, and has said it would refill the reserve when oil prices fell to around $70 a barrel.

    U.S. benchmark West Texas Intermediate crude oil fell below $70 a barrel to their lowest level in 15 months on March 21.

    Why was the market so surprised?

    The OPEC+ decision took the financial market by surprise.

    “If fully delivered, the announced cut would further tighten an already fundamentally tight oil market, driving the Brent benchmark towards $100 per barrel sooner than previously expected, and would push the price to around $110 per barrel this summer,” said Jorge Leon, senior vice president at Rystad Energy.

    Before the new OPEC+ cuts, Rystad Energy was anticipating the crude-oil market to be in a supply deficit to the “tune of 1.4 million” barrels a day between May and August, he said in emailed commentary. The voluntary cuts will put “upside pressure on prices from a fundamentals perspective, offering support of around $10 per barrel.”

    On Monday, the front-month May WTI oil futures contract
    CLK23,
    -0.01%

    CL.1,
    -0.01%
    climbed 6.4% to trade above $80.50 a barrel ahead of the closing bell on the New York Mercantile Exchange. Global benchmark June Brent oil
    BRNM23,
    -0.18%

    BRN00,
    -0.18%
    rose $4.75, or 6.3%, to close at $80.42 a barrel on ICE Futures Europe.

    “Positioning in crude is extremely light after the recent financial market driven weakness,” said Babin. Last week’s rally was driven primarily by short covering and modest re-engagement from long buyers,” she said, adding that the long position, or bets that oil will rise in value, is “very modest, with the managed money long-short ratio at 2.5, the lowest since December 2022.”

    Large short positions held by speculative traders can make for more explosive rallies as “weak-handed” players are forced to buy futures to close out losing trades.

    Craig Golinowski, managing partner at Carbon Infrastructure Partners, also pointed out to MarketWatch that paper market for oil is “very thin.” Fewer participants and financial flows have created downside pressure on oil, he said, so OPEC is “physically managing production to maintain a tight market to ensure investment into production remains stable, regardless of the paper market for oil.”

    The energy market saw broad gains, with company shares and exchange-traded funds, including the Energy Select Sector SPDR Fund
    XLE,
    +4.53%    ,
    rallying in the wake of the OPEC+ news.

    St. Louis Federal Reserve President James Bullard on Monday said the spike in oil prices after the OPEC+ cut announcement may make the central bank’s inflation-fighting job “a little more difficult,” though it is too soon to know for sure.

    The latest spike in oil prices may “play a hand in what the Fed does next regarding its fight against inflation,” particularly if the latest jump in oil is sustained as oil at the current level “won’t be doing the inflation rate any favors,” said Tim Waterer, chief market analyst at Kohle Capital Markets.

    Read: Oil-production cuts could force Fed to raise interest rates even higher to fight inflation

    Will OPEC+ lose market share?

    In the past, OPEC+ has been concerned about the loss of oil-market share when it decides to make production cuts.

    This time, however, there is “limited threat to market share,” said CIBC Private Wealth’s Babin.

    Previously, when OPEC+ cut production, they would lose market share to U.S. shale oil producers, she said. “However, “U.S. shale producers have entered a period where growth is limited due to financial discipline.”

    Recent developments in regional banks has “likely lowered shale producers’ ability to quickly get capital to increase production,” said Babin.

    Total U.S. petroleum production stood at 12.2 million barrels a day as of the week ended March 24, down 100,000 barrels per day from a week earlier, according to data from the Energy Information Administration.

    OPEC would usually “hesitate to reduce barrels, with fears of ceding market share to U.S. shale, but the slowing of U.S. production and their dedication to a disciplined approach has alleviated the Saudi’s fear of rapid U.S. growth,” said Alex Hodes, energy analyst at StoneX.

    What are the geopolitical implications?

    Meanwhile, James Swanston, Middle East and North Africa economist at Capital Economics, in a note said the OPEC+ move was likely motivated by geopolitics and Saudi Arabia’s “shift away from the West.”

    Saudi Arabia’s ties with the U.S. are “fraying,” he said.

    Swanston also said the production decision has implications for the future of OPEC+ oil policy, as well as the “patience of members, particularly, the UAE.”

    The U.A.E. agreed to these voluntary output cuts, but it was reported last month that officials were growing impatient at the bearish OPEC+ stance and had discussed internally whether to leave the group, said Swanston.

    The Wall Street Journal: Saudi Arabia and U.A.E. Clash Over Oil, Yemen as Rift Grows

    The U.A.E. wants to “increase oil output sooner rather than later as shown by its move to bring forward its oil production capacity target from 3.1 [million barrels per day] currently to 5 million bpd by 2027,” instead of the year 2030, said Swanston.

    He said the U.A.E. had twice previously threatened to leave OPEC+ and that there was speculation that the U.A.E. was strongly against the Saudi-led decision to cut OPEC+ oil output quotas by 2 million bpd in October.

    “If the OPEC+ strategy of lower oil production persists, then tensions could escalate, and the U.A.E. could ultimately opt to leave OPEC+,” Swanston said.

    What do the cuts say about demand?

    The production cuts will take effect in May, which is “right ahead of Memorial Day and the start of U.S. driving season,” said Stacey Morris, head of energy research with VettaFi.

    Given that, “it could be another summer with painful prices at the [gasoline] pump,” she said.

    The average price for regular unleaded gasoline stood at $3.506 a gallon on Monday, up from $3.439 a week ago, but down from $4.192 a year ago, according to AAA.

    Read: The surprise OPEC+ oil production cuts will increase gas prices — here’s how much

    Still, some traders may interpret the OPEC+ cut as a sign of weaker than expected demand for physical markets, given that OPEC+ possesses “some of the best information available in regards to the global physical oil markets,” said Rob Thummel, portfolio manager at Tortoise.

    However, “ we still expect global oil demand to accelerate throughout 2023, reaching a record high in the second half the year,” he said.

    Global oil inventories are below normal and will likely “remain below normal as higher demand and less supply deplete inventories throughout the year,” Thummel said, noting that Tortoise expects oil prices to be range bound between $85 and $95 for the year.

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  • The surprise OPEC+ oil production cuts will increase gas prices — here’s how much

    The surprise OPEC+ oil production cuts will increase gas prices — here’s how much

    Surprise crude oil production cuts from Saudi Arabia and other oil-rich countries shouldn’t produce worries of skyrocketing gas costs for U.S. drivers still smarting from last year’s pump price shocks, according to fuel industry experts.

    At a time when gas prices are already increasing because of rising seasonal demand, the slashed crude oil output that Saudi Arabia announced Sunday will translate into higher prices, they say. But compared to last year — when energy markets were absorbing the initial impact of Russia’s invasion of Ukraine — the altitude on those gas price increases may not feel so steep.

    On Monday, the national average for a gallon of gas was $3.50, according to AAA. That’s around 10 cents more than a month ago, but almost 70 cents less than the $4.19 average cost one year ago.

    The effects of decreased oil production could translate into initial price increases of up to 15 cents per gallon, according to two different energy sector watchers.

    There’s Patrick De Haan, head of petroleum analysis at GasBuddy.

    At OPIS, an outlet focused on energy sector news and analytics, Chief Oil Analyst Denton Cinquegrana said he was previously expecting summer gas prices to average around $3.60.

    “This move probably boosts that by about 10 – 15 cents to about $3.70-3.75/gal.” Cinquegrana told MarketWatch.

    OPIS is owned by Dow Jones, which also owns MarketWatch.

    It’s possible for gas price averages to hit around $3.60 in the next week or so, he said. The other 10 to 15 cents might filter into retail pump prices later this month or in early May, according to Cinquegrana.

    The surprise move came from Saudi Arabia and other members of OPEC+, the Organization of the Petroleum Exporting Countries and allies, including Russia. In Saudi Arabia, officials were reportedly “irritated” by recent remarks from U.S. Energy Secretary Jennifer Granholm.

    After the Biden administration tapped the country’s strategic petroleum reserve to combat last year’s high gas costs, Granholm said it will difficult to restock the reserve.

    By May, more than 1 million barrels of oil a day will be slashed from output in the global energy markets. That’s in addition to OPEC+ production cuts announced last fall.

    In cost breakdowns for a gallon of gas, the price of crude oil is responsible for more than half the price tag, according to the U.S. Energy Information Administration.

    In Monday morning trading, the price of West Texas Intermediate crude for May delivery jumped 6% to just over $80 on the New York Mercantile Exchange.

    For context, when gas prices were breaking records last year, the costs of West Texas Intermediate crude were in the triple digits. While retail prices surged in early March 2022, West Texas Intermediate crude briefly traded for more than $130 during the trading day on March 7, 2022.

    The national average for a gallon of gas hit a record $5.01 in mid-June, according to AAA. In the current context, Cinquegrana doesn’t see a return to $5 gas averages, he said. Gas prices vary across the nation. California drivers are paying $4.80 on average while Mississippi drivers are paying $3.02 per gallon. 

    Even if price increases are not as sharp as last year, hot inflation is retreating slowly. So any extra costs are unwelcome to millions of American drivers who are living their lives and more frequently commuting to the office.

    Like last year, oil prices are poised to increase, said AAA spokesman Devin Gladden.

    But the economy’s background noise right now could dampen the impact as downturn worries keep sticking around, he added. Furthermore, there can be discrepancies in the announced production reductions and the amounts that are actually reduced, Gladden said.

    “If recessionary concerns persist in the market, oil price increases may be limited due to the market believing lower oil demand will lead to lower prices this year,” he said.

    On Monday, energy sector stocks and related exchange traded funds were climbing after the production cut news. In early afternoon trading, the Dow Jones Industrial Average
    DJIA,
    +0.81%
    was up more than 200 points, or 0.7%, while the S&P 500
    SPX,
    -0.03%
    is little changed and the Nasdaq Composite
    COMP,
    -0.98%
    dropped 100 points, or 0.8%.

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  • Oil prices soar after Saudi Arabia leads coordinated OPEC+ cuts totaling more than 1 million barrels a day

    Oil prices soar after Saudi Arabia leads coordinated OPEC+ cuts totaling more than 1 million barrels a day

    Oil prices spiked late Sunday, after Saudi Arabia led a surprise oil production cut across several OPEC+ nations that will remove more than 1 million barrels of oil a day from May.

    In an announcement on Sunday, Saudi Arabia’s Ministry of Energy stated that the kingdom will implement a voluntary cut of 500,000 barrels a day from May until the end of 2023, in conjunction with other countries.

    It said that the “voluntary cut is in addition to the reduction in production” agreed at the OPEC meeting in October and “is a precautionary measure aimed at supporting the stability of the oil market.” OPEC+ agreed in October to cut production by two million barrels a day from November, a move that angered the Biden administration.

    Russia’s deputy prime minister, Alexander Novak, said his country would extend a March production cut of 500,000 barrels a day through the end of the year. OPEC+ is made up of members of the Organization of the Petroleum Exporting Countries and its allies, including Russia.

    “Today, the world oil market is experiencing a period of high volatility and unpredictability due to the ongoing banking crisis in the U.S. and Europe, global economic uncertainty and unpredictable and shortsighted energy policy decisions. At the same time, predictability in the global oil market is a key element in ensuring energy security,” Novak said in a statement.

    News of the production cuts sent prices soaring late Sunday. Front-month West Texas Intermediate crude for May delivery
    CL.1,
    +6.81%
    topped $80 a barrel while Brent crude
    BRN00,
    +6.77%    ,
    the global benchmark, surpassed $85 a barrel.

    The cuts come after a first quarter that saw a sharp decline in crude prices. Oil bulls were disappointed that China’s lifting of strict COVID curbs didn’t provide stronger support to prices, while aggressive tightening by central banks and fears that banking woes in the U.S. and Europe could turn into a full-fledged crisis stoked recession fears.

    West Texas Intermediate crude for May delivery, which ended at $75.678 a barrel on Friday, suffered a March loss of 1.8% and a quarterly decline of 5.7%, according to Dow Jones Market Data. Brent crude fell 4.9% in March and 7.2% in the first quarter, ending Friday at $79.77 a barrel.

    Elsewhere, Kuwait’s oil ministry said the country will cut 128, 000 barrels a day, while the United Arab Emirates said it would cut its production by 144,000 barrels a day, according to a statement by Energy Minister Suhail Al Mazrouei, reported by Attaqa Breaking News. Oman said it would implement a voluntary cut of 40,000 barrels a day. Kazakhstan said it would cut by 78,000 barrels a day and Algeria said it would cut by 48,000 barrels a day.

    Ole Hansen, chief commodities strategist at Saxo Bank, said the announcement “came out of the blue.”

    “Producers were clearly frustrated by the recent slump which was speculative more than fundamentally driven. They will likely achieve a return to the $80s while also trying to pre-empt a smaller than expected increase in global oil demand in the coming months. Remember most of the +2 m b/d increase expected for this year is backloaded into the second half with plenty of room for error should economic slowdown be as severe as currently priced in by the market through expectations of U.S. rate cuts,” Hansen told MarketWatch.

    “The Saudi oil minister love[s] to wrong foot the market, especially when it comes to hurting speculative short sellers,” said Hansen.

    The move also comes as the U.S., Europe and elsewhere continue to battle inflation. Oil prices have fallen sharply over the last 12 months, after spiking to more than $120 a barrel following Russia’s invasion of Ukraine last year. Brent was down roughly 24% from a year earlier at Friday’s close.

    The new cuts, if fully implemented, should make for a significant draw on crude inventories in the second quarter as opposed to previous expectations for an early third-quarter draw, said Giacomo Romeo, energy equity analyst at Jefferies, in a note.

    “The only potential downside to this decision is that bears in the market could perceive the cut as a validation of the recent demand concerns,” he wrote, noting that compliance with past targets has also been in issue.

    The U.A.E., for example, was seen producing around 200,000 barrels a day above its target for a few months, while Russian output in March didn’t see the full 500,000 barrel-a-day reduction announced in February, Romeo noted.

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  • U.S. oil benchmark drops to 14-month low as recession fears mount

    U.S. oil benchmark drops to 14-month low as recession fears mount

    Oil futures extended a slump Wednesday, with the U.S. benchmark dipping below the $70 level and touching its lowest intraday level since December 2021 as the fallout from a banking crisis stoked recession fears.

    Investors were also awaiting official data on U.S. crude inventories after industry data was said to show a rise in oil stocks but declines in gasoline and distillate levels.

    Price action
    Market drivers

    Trouble…

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  • Biden approves Willow oil-drilling permit in Alaska. It’s a ‘carbon bomb,’ one group says.

    Biden approves Willow oil-drilling permit in Alaska. It’s a ‘carbon bomb,’ one group says.

    The Biden administration approved the large-scale and controversial Willow drilling project for ConocoPhillips on Alaska’s oil-rich North Slope on Monday.

    The approval, although with some conditions, is one of President Joe Biden’s most consequential climate choices of his first administration.

    It’s a blemish, say environmental groups, to…

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  • Three Oil Stocks Exposed to Natural-Gas Plunge

    Three Oil Stocks Exposed to Natural-Gas Plunge

    Natural-gas prices have tumbled this year because of warm weather and high levels of gas in storage in Europe and elsewhere. U.S. prices are down 45% to $2.46 per million British thermal units.

    The drop has impacted stocks of some natural-gas producers, though not nearly as much as the price of the commodity itself. As natural-gas prices stay low, however, the impact could widen and pressure a larger group of companies. Stocks of oil producers that also produce significant amounts of gas are vulnerable to the decline, too. Overall, free cash flow for large-cap producers could fall 33% from 2022 levels, according to Citi analyst Scott Gruber. That could keep some oil companies from being able to boost their dividends and buybacks as much as they did last year.

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  • Turkey ETF tumbles and lira slumps to record low after major earthquake adds to economic woes

    Turkey ETF tumbles and lira slumps to record low after major earthquake adds to economic woes

    Turkey’s lira hit a record low and its stock market tumbled on Monday after a major earthquake killed nearly 1,500 people and wounded thousands of others in the country, piling on further economic hardship in a region already grappling with economic instability and geopolitical turmoil. Another 700 deaths have been reported in Syria, according to Reuters.

    The Turkish lira
    USDTRY,
    +0.05%
    fell to a record low of 18.83 against a strong dollar on Monday, while the country’s major stock index, the Turkey ISE National 100
    XU100,
    -1.35%
    — which tracks the performance of 100 companies selected from the National Market, real estate investment trusts and venture capital investment trusts listed on the Istanbul Stock Exchange — tumbled 1.4%. 

    The iShares MSCI Turkey ETF
    TUR,
    -1.88%    ,
    which tracks several dozen Turkish equities, slumped 1.9%. 

    Also see: 7.8-magnitude quake kills more than 1,900, knocks down buildings in southeast Turkey and Syria

    At least 1,498 people were killed and 8,533 people were injured in Turkey when a magnitude 7.8 earthquake struck central Turkey and northwest Syria early Monday morning, followed by another large quake in the afternoon, according to Yunus Sezer, the head of Turkey’s Disaster and Emergency Management Agency.

    The U.S. Geological Survey estimated on Monday that there was a high probability that the economic losses from the initial earthquake could top $1 billion.

    The ICE U.S. Dollar Index
    DXY,
    +0.72%    ,
     a measure of the currency against a basket of six major rivals, jumped 0.7% on Monday.

    See: Oil prices look to extend last week’s slide

    Oil futures traded lower as of Monday morning despite news reports that Turkey has halted crude-oil flows to its export terminal in Ceyhan. Turkish pipeline operator BOTAS said there was no damage on main pipelines which carry crude oil from Iraq and Azerbaijan to Turkey, according to Reuters.

    Iraq’s semi-autonomous Kurdistan Regional Government has stopped shipments through the pipeline which runs from Iraq’s northern Kirkuk fields to Ceyhan, the region’s ministry of natural resources said on Monday.

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  • Shell adjusted profit of $9.8 billion beats forecasts, boosted by soaring energy prices

    Shell adjusted profit of $9.8 billion beats forecasts, boosted by soaring energy prices

    LONDON–Shell PLC became the latest oil giant to post record annual profit last year, joining U.S. peers in surging back from early pandemic losses on soaring energy prices.

    Shell’s
    SHEL,
    +3.00%

    SHELL,
    +2.24%

    SHEL,
    -0.83%
    $41.6 billion full-year profit surpassed the London-based company’s previous record of $31.4 billion in 2008, measured on a net current-cost-of-supplies basis–a figure similar to the net income that U.S. oil companies report.

    The results bring to more than $132 billion the combined profit last year of the three big majors including historic results from Chevron Corp. and Exxon Mobil Corp., reported during the past week. Their hauls, driven by strong global energy demand, erase billions of dollars of losses incurred during Covid lockdowns as global travel and economic activity sputtered.

    Shell’s earnings included fourth-quarter profit on a net current-cost-of-supplies basis of $11.4 billion, compared with $11.2 billion in the year-ago period. Results were boosted by strong performance in Shell’s liquefied natural-gas business, which benefited from soaring global demand after Russia cut off pipeline gas supplies to Europe.

    Adjusted fourth-quarter earnings, which strip out certain commodity-price adjustments and one-time charges, were $9.8 billion. That beat the consensus forecast of $8 billion for the quarter in a survey of 28 analysts compiled for Shell by an outside firm.

    Shell’s results are the first reported under Chief Executive Officer Wael Sawan, who took over the role Jan. 1 from longtime boss Ben van Beurden. The 48-year-old Mr. Sawan, a dual Lebanese-Canadian national who joined Shell in 1997, rose through the ranks to oversee Shell’s natural-gas business, which has driven record profits, and more recently renewable energy.

    Write to Jenny Strasburg at jenny.strasburg@wsj.com

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  • U.S. stocks climb as GDP report shows economy taking Fed’s rate hikes in stride

    U.S. stocks climb as GDP report shows economy taking Fed’s rate hikes in stride

    U.S. stocks opened higher on Thursday as optimism over Tesla’s earnings results and a stronger-than-expected GDP report left investors in a better mood following Wednesday’s intraday selloff.

    How are stocks trading
    • The S&P 500
      SPX,
      +0.40%
      rose by 34 points, or 0.8%, to 4,049.

    • Dow Jones Industrial Average
      DJIA,
      +0.05%
      gained 145 points, or 0.4%, to 33,889.

    • Nasdaq Composite
      COMP,
      +0.89%
      advanced 174 points, or 1.5%, to 11,487.

    The Dow Jones Industrial Average finished Wednesday’s session up 10 points after falling roughly 400 points at the lows earlier in the session. The S&P 500 finished little-changed after erasing its early losses, while the Nasdaq ended lower.

    What’s driving markets

    Stocks opened higher after a flurry of economic data including a fourth quarter GDP report that came in stronger than expected, but the focus was on the latest batch of earnings, which helped to revive investors’ optimism following disappointing guidance from Microsoft Corp.
    MSFT,
    +1.35%
    earlier in the week.

    The economy grew at a robust 2.9% annual pace to close out 2022, according to the first estimate of fourth quarter GDP, released Thursday morning — the latest sign that the U.S. economy is holding up well despite the Federal Reserve’s aggressive interest-rate hikes.

    “Thursday’s GDP report suggests that the economy is relatively strong even in the face of aggressive measures by the Federal Reserve to calm inflation,” said Carol Schleif, chief investment officer, BMO Family Office, in emailed commentary.

    Stocks rose after the data were released as investors found solace in the latest signs that a soft landing for the U.S. economy — a scenario where growth slows, but a recession is avoided — remains possible, or even likely.

    “This is a bit of a relief rally,” said Christopher Zook, chairman and chief investment officer of CAZ Investments.

    However, corporate earnings and guidance are still the primary concern for investors, along with expectations about when the Federal Reserve will cut interest rates, Zook said.

    The labor market also showed signs of strength despite more reports of layoffs in the tech, finance and media spaces, as the number of Americans filing for unemployment benefits fell to their lowest level since April. Investors also digested durable goods orders for December. New home sales for December will be published at 10 a.m. ET.

    Investors also celebrated a surge in Tesla Inc.
    TSLA,
    +9.64%
    shares premarket after the firm released well-received results that showed record quarterly profits.

    Disappointing guidance from technology behemoth Microsoft had clobbered stocks on Wednesday as traders worried it signaled not just difficulties for the sector but also broadly worsening economic conditions.

    However, before the end of Wednesday’s session, Microsoft shares had recovered most of their 4.5% loss and the S&P 500 finished the session almost exactly where it began, according to data from FactSet.

    As for the Federal Reserve, the central bank is expected to slow the pace of interest rate hikes when it next week raises its policy rate by 25 basis points to a range of 4.5% to 4.75%.

    Companies announcing results on Thursday include: McDonald’s
    MCD,
    -0.28%    ,
    Intel
    INTC,
    -0.34%    ,
    Comcast
    CMCSA,
    +0.86%    ,
    Visa
    V,
    +0.15%    ,
    Dow
    DOW,
    -1.16%    ,
    Whirl pool
    WHR,
    -0.91%    ,
    Western Digital
    WDC,
    +3.72%
    and Northrop Grumman
    NOC,
    -0.90%    .

    Companies in focus

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  • 5 Energy Stocks Poised to Keep Growing Earnings

    5 Energy Stocks Poised to Keep Growing Earnings

    Several energy companies are expected to post record earnings in 2022.


    Exxon Mobil


    alone is on track to make about $60 billion. But 2023 is a different story. While the setup is still very strong for most oil-and-gas companies, many are expected to see their earnings per share fall from 2022 levels.

    Oil prices have fallen well below last year’s highs, and natural gas has slipped too. Producers of oil and gas are also expecting higher costs this year, with oil services companies raising their rates. 

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