The Crude Oil "Freeze"

The government/Fed/big banks have achieved quite an accomplishment in getting the stock market at the highest level it can right before April 15th and earnings season which began today with Alcoa’s less than stellar performance.

Today’s rabbit out of a hat were reports that both Saudi Arabia and Russia agreed to an oil production freeze, even though the official meeting is this coming Sunday in Doha, Qatar. Keep in mind this supposed freeze was nothing more than Saudi Arabia agreeing that it would continue to produce oil at its maximum rate and that nothing would stop Russia from producing as much as oil as it wants as well. Freezing oil production is simply a term for producing as much oil as they can at current maximum production rates.

However, Iran can produce as much oil as it wants, as well. So, Sunday they are supposedly going to agree to all this.

Never mind that neither the Russians nor the Saudi oil minister confirmed this story. Yet this is the story that was reported to the media and oil prices shot up $1.81 today to close at $42.17 a barrel. March’s high was $42.49 – so, just under that resistance level.

Earnings take focus

Naturally, such an oil pump, whether it was rigged or not will trigger a bounce in the stock market during this crucial tax week.

However, now that we are in the earnings season, analysts are bracing for the biggest overall decline in earnings since the great recession. Corporate earnings have been falling since the second quarter of last year but you wouldn’t know that judging by the Fed’s jacking up of stock prices.

Last year, energy companies led the plunge in earnings, but the financials are set to take the biggest hit this year or so the stock market is suspecting.

We have been warned by the big banks themselves first quarter’s earnings are going to be down. The big banks will report earnings Wednesday (JP Morgan)…which will set the tone, then Thursday (Wells Fargo and Bank of America) and Friday (Citigroup).

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