The Wall Street Bank Selloff Yesterday Was More About Oil than Big Tech

The Wall Street Bank Selloff Yesterday Was More About Oil than Big Tech By Pam Martens and Russ Martens for Wall Street on Parade

The mega banks on Wall Street joined the tech wreck yesterday as illustrated on the chart above. The selloff in these banks can be attributed to, primarily, the selloff in the price of crude oil – which suggests the banks will be forced to increase loan loss reserves as the threat of more bankruptcies among debt-strapped U.S. oil producers increases.

Domestic crude oil, known as West Texas Intermediate or WTI, had a $41 handle on Friday on the Nymex. Yesterday, that turned into a $36 handle – a decline of 12 percent from Friday. A WTI handle below $40 is panic-time for U.S. independent oil producers who are deep in debt and struggling to avoid bankruptcy.

The big summer driving season that was expected to boost crude demand was officially over the day after Labor Day. But, in fact, a big surge in demand from summer travel had never really materialized because a family doesn’t drive to a vacation destination if they’re afraid to stay in a hotel because of the pandemic. Add the decline in demand for jet fuel because people are afraid to breathe the air of strangers on airplanes and you begin to see a real problem with oil demand going forward.

Closing Prices of Big Tech and Big Banks on September 8, 2020

Closing Prices of Big Banks and Big Tech on September 8, 2020.
Stock Symbols: C, Citigroup; JPM, JPMorgan Chase; GS, Goldman Sachs;
MS, Morgan Stanley; BAC,  Bank of America; AMZN, Amazon;
AAPL, Apple; FB,  Facebook; GOOG, Alphabet, parent of Google; MSFT,  Microsoft.

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Rory Hall, The Daily Coin and Gospel News Network. Beginning in 1987 Rory has written over 1,400 articles and produced more than 500 videos on topics ranging from the precious metals market, economic and monetary policies, preparedness as well as geopolitical events. His articles have been published by Zerohedge, SHTFPlan, Sprott Money, GoldSilver, Gold Seek, SGTReport, and a great many more. Rory was a producer and daily contributor at SGTReport between 2012 and 2014. He has interviewed experts such as Dr. Paul Craig Roberts, Dr. Marc Faber, Eric Sprott, Dr. Warren Coates and Peter Schiff, to name but a few. Don't forget to visit The Daily Coin and Gospel News Network to enjoy some of the best economic, precious metals, geopolitical and preparedness news from around the world.