You have to be kidding me with this right now.
I just went from a plus 20% year to flat, in the matter of a few short weeks. This blow up in the oil sector is vicious. It is the legacy of the collapse this spring – the tech debacle’s bastard twin. I can only look on in a state of minor shock, watching this unfold for…really no particular reason.
Some people just woke up one morning and said “I think billions in market cap should vanish”.
Then they did.
There is no data driving this. The Fed data is not showing a slow down. Europe data is as bad as ever…but no worse. Oil demand estimates have been revised lower…to a still larger number.
This near total collapse is being fed by the end of QE, a half cocked conspiracy theory concerning Saudi Arabia and the Russians, and fear.
And it is getting so bad, the sector is actually at risk of sustaining real damage, should the hearts of energy producers seize. What is at stake here is nothing short of the US recovery, all thanks to some investors getting wobbly legs.
BAS is trading back in the $16 range. HCLP is a $40 stock again. Are you joking? To the best of my knowledge, both of these companies has not seen a single cancellation of business. Actually, contractually, HCLP cannot see such a thing, unless their customers all go out of business.
The only word that even adequately describes what we are seeing is – panic.
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