How Low Can Oil Go? with Nick Santiago (Ep. #21)

from Daily Market Wisdom with Nick Santiago

For more than 20 years, Master Trader Nick Santiago has been beating the markets. He’s made some incredible calls along the way and now he’s looking to spread the word. There’s no reason that the average trader should be coming up short. So now we’ve started a daily show to bring you up to date on the latest market developments. Nick will be sharing trades and concepts and discussing current trends. Today we discuss:

1. Crude oil plunging today. June crude is falling lower by 26% to $12.46/ barrel. Diamond Offshore (DO) filed for Chapter 11 bancruptcy protection. Believe it or not, there will be others to follow, this is what has to happen in order for oil to bottom. We’re starting to see economies around the country open up. Probably the last decline, but you never know! Fill up your tanks now while the going is good. Fracking oil companies are going bankrupt. Perhaps some hedge funds will go down too.

2. General Motors (GM) suspends quarterly dividend and share repurchase program. This probably should have been done sooner. in these conditions it is not practicle to pay a dividend. Other companies have already started to do this and more will follow. Actually the stock has held up pretty well. More dividend cuts are coming. Anything that’s been hit by the virus will need to cut their dividends and stop buybacks. Nick never chases dividends. It can be dangerous for income investors but what choice do they have? Nick believes it’s probably not going to have much affect on the share prices.

3. Big cap tech reports this week. It’s a monster week. Important week for large cap tech. Tech has led the advance and is the strongest sector. That’s why they’re so important to watch. Buffet has a monster position. Online marketplaces are booming. eBay has risen to $40 because people are staying at home.

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