Obsidian Market Update 10/21/2023
Economic Update
In this issue we cover three topics that make strange bedfellows: oil prices, bugs, and estate executors. Read on to see what we’ve been thinking about this week.
Thoughts About Oil Prices
One of the macroeconomic factors we keep tabs on is the price of oil. The effect it has on our economy is hard to understate.
- By weight (11.46 billion tons), trucks move approximately 72.6% of the nation’s freight.
- The average number of miles we drive in a year is approximately 13,500.
Oil & Inflation
The price of oil has an enormous effect on the price we pay for almost everything we buy. So enormous that the price of oil can directly affect the rate of inflation, and the inflation rate is squarely in the sights of Chairman of the Board of Governors of the Federal Reserve System, Jerome H. Powell.
The Board will meet again on October 31 and November 1. While the Fed tracks other trends, among them labor market conditions, financial and international developments, inflation remains its stubborn adversary. The current interest rate stands at 5.25% to 5.5%, and the latest inflation number (3.7% in September) exceeds the Fed’s target rate of 2% by nearly 100%.
The Law of Supply and Demand
The U.S. Energy Information Administration predicts that oil prices will rise during the last quarter of 2023 due, in part, to the decline in global inventories. OPEC and OPEC+ countries decided to extend their voluntary production cuts of crude oil through the end of the year. Mitigating these production cuts, however, is the increase in U.S. oil production.
Current Events
Events on the world stage also affect the price of oil. For example, on October 5, the price of oil fell by 2%. On Saturday, October 7, Hamas invaded Israel and on Monday October 9, the price jumped by 4%. On October 16, news of a pact between the U.S. and Venezuela that would ease sanctions on Venezuela’s oil exports caused the price of oil futures to fall once again.
Will the war between Israel and Hamas affect oil prices? The answer depends on whether and by how much the conflict escalates. If Iran is implicated in the Hamas attack, the U.S. could increase sanctions on Iranian-produced oil. If transportation through the Strait of Hormuz is disrupted, prices would likely be affected.
As always, we keep tabs on a host of factors that can impact your portfolio, so if you have any questions or concerns, please give us a call.
Lifestyle
Bed bugs in Paris?
Is Paris a hotbed for bed bugs? (Sorry, we just couldn’t resist that one.) Recent tabloid headlines would suggest that there’s a hoard of the little buggers taking up residence in the City of Bites . . . er Lights.
Reliable data on the existence and extent of this invasion are difficult to come by, and yet President Emmanuel Macron’s party has promised to introduce a bill to squash the number of six-legged visitors.
The mayor of Paris recently tweeted that “No one is safe,” so until further notice, we’re taking our cue from Patrick Mahomes and we’re going to Disneyland! Seems that bed bugs have no place in the Magic Kingdom of Disneyland Paris.
How We Help
Tips for Executors
Being named as the executor (or personal representative) of someone’s estate is a mixed blessing. The person who named you trusted you to properly carry out the wishes expressed in their will. That person has also charged you with a fiduciary duty to locate all the assets, pay any outstanding debts and any taxes due, and disburse the balance of the deceased’s assets to named beneficiaries.
Depending on the size and complexity of a person’s estate and the level of cooperation among heirs, these duties can be time consuming and overwhelming.
We’ve helped many clients navigate the duties of executor, so if you (or someone you know) are wondering where to begin or how to wrap up your role as executor, we’re a phone call away.
Advisory Services offered through Obsidian Personal Planning Solutions, LLC. Securities are offered through Triad Advisors, member