Growing GDP, thank GPT
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What economic data is highlighted at the beginning of the episode?
Storms, floods, and fires are ever more extreme. And yet, the Federal Emergency Management Agency is fighting for its life.
I've never been a big fan of FEMA. FEMA's a disaster. FEMA's a dirty word. People are waking up in droves to the FEMA camps. Can the agency survive the stories that have been told about it?
And can we survive without FEMA? American Emergency, the movement to kill FEMA, is a brand new series from WNYC's On The Media. Listen wherever you get your podcasts. We'll do some oil, we'll do some data, and we'll wrap it all up with a nice bowl of beans. From American Public Media, this is Market Class. In Los Angeles, I'm Kai Rizal. It is Thursday today, the last day of April. Good as always to have you along, everybody. There is some economic data with which we could begin today, and we will get to it in a minute, I promise. But we're going to start instead with a number. That number is 126.41. The proper denomination is U.S. dollars. The commodity associated with it is Brent North Sea Crude, which in the wee small hours of this morning hit the aforementioned $126.41 a barrel.
That's June delivery, which is to say the future's price. Now, as we sit here at the two-month mark of the most severe energy shock the world has ever seen, as every day countries are chewing their way through their inventories and ever less oil is being produced and delivered, the competition for those barrels gets steeper and steeper. And that is showing up in futures market, yes, which I just talked about, but more significantly in the physical market for oil, the very high price you will pay to get a barrel delivered to you today. The thing is, as Marketplace's Elizabeth Troval reports, that spot price isn't what financial markets tell us it should be.
Let's say I'm trying to buy a million barrels of crude oil. I had a contract from a producer in the Middle East, but that oil is tied up in the Strait of Hormuz. So I need oil now on the spot market for a lot more money. Joe DeLora is with Rabobank.
The physical market is skyrocketing.
We've seen delivery for physical Brent crude going, you know, like one hundred and forty four dollars.
well above the on-paper prices being set by Wall Street types.
It's a divergence of what people think versus reality.
It's this tension between what financial markets think is going to happen with the war versus what it's like to actually get oil in the physical market today. Dan Pickering is with Pickering Energy Partners.
The financial markets are essentially saying over a period of time, the expectation is peace is going to break out and that prices will come down. My view is they don't reflect the tightness of the current physical market.
He expects that futures prices will have to come up to reflect that crude reality.
The straight before news is not opening. Our inventories continue to draw down literally every single day.
And I think where we're headed is that physical tightness in one part of the world is going to meld into physical tightness across the world.
And the reality of the physical market is already starting to hit, says Tom Sang with Texas Christian University. Just look at oil price spikes this week.
To me, it's almost as if the market woke up and said, oh, look, we got to we got to stop being optimistic.
But are financial markets pessimistic enough? Well, there's always a chance this war could end tomorrow. Tseng thinks that with summer travel season coming up, prices should probably be even higher than markets are expecting. I'm Elizabeth Troval for Marketplace.
Small solace though it may be, Brent futures did calm down as the day went on, about $114 a barrel at the close. Equities, a perhaps useful reminder here that the Dow Jones Industrial Average is what's known as a price-weighted index. That is, the more expensive a Dow component is, the more a change in that company's share price affects the overall average, which gets me to the second most expensive company in the Dow 30, Caterpillar. Shares today up almost 10%. That drove the Dow overall up a percent and a half.
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Chapters
7 chapters
1
What economic data is highlighted at the beginning of the episode?
0:00–5:55
2
How is artificial intelligence influencing GDP growth?
5:55–7:30
3
What are the implications of rising crude oil prices on the economy?
7:30–13:47
4
How is the airline industry facing a technician shortage?
13:47–16:41
5
What challenges are retailers facing in the current economic climate?
16:41–22:56
6
What is the significance of the bean craze in today's market?
22:56–24:01
7
How are consumer preferences shifting towards beans?
24:01–27:01