Drivers
Will Gas Prices Ever Go Down?
As it becomes increasingly painful to fill up your gas tank, you might well be wondering: Will gas prices go down at some point?
Fuel prices feel like they’ve been on a never-ending ride higher of late. A year ago, the national average price of regular unleaded was $2.96 per gallon, according to travel website AAA. A month ago, it was $4.12. Today, it’s $4.33. And it’s probably heading higher still this spring.
- SEE MORE The 25 Cheapest U.S. Cities to Live In
We recently looked at the reasons why gas prices are so high: global oil demand rebounding from the pandemic faster than production. The war in Ukraine. Efforts in the U.S. to transition the economy away from reliance on fossil fuels. Energy companies’ reluctance to invest in more oil production.
Now, we’ll try to answer the question undoubtedly on many drivers’ minds: Will gas prices go down soon â and if so, what will do the pushing?
Fuel Tax Relief?
A few states have tried to ease the financial burden on their residents by suspending their state fuel taxes for a short period. But are gas prices doing down because of those moves?
Not really.
For instance, Connecticut suspended its 25-cent-per gallon state levy on fuel for April, May and June. But according to AAA, the average price of regular unleaded in the Nutmeg State today is $4.32, up from $4.13 a week ago. Increases in crude oil prices can swamp the effect of suspending a state’s gas tax. And when those state taxes are paused, the savings don’t all go in the driver’s pocket. Fuel sellers keep some portion of them.
Could the federal government give drivers nationwide a tax cut by suspending the 18.3-cent-per-gallon federal tax on gas? Unlikely, report my colleagues at The Kiplinger Letter, who regularly speak with lawmakers on Capitol Hill to assess which bills have a chance of passing.
In the case of a proposed suspension of the federal gas tax, Democrats, the majority party, can’t agree among themselves to do it.
More Oil on the Way
Here’s a little good news: More crude oil should be reaching the global market later this year, which means more gasoline and other refined fuels. Eventually, that should help push gas prices down, or at least keep them from rising so fast.
- SEE MORE Calculating Taxes on Social Security Benefits
In the U.S., energy companies are slowly putting more rigs to work drilling new wells, even as they prioritize returning cash to investors via share buybacks and dividends. Oilfield services company Baker Hughes reports on the number of working rigs in the U.S. each week, and most weeks lately, the tally has risen a bit. Meanwhile, OPEC announced last week that it will continue with its plan to gradually restore the oil exports it cut in 2020 when prices plunged, which means adding about 400,000 barrels of daily exports each month.
The bad news: Neither domestic oil output nor OPEC’s sales are rising fast enough to push oil prices down now. And that means gas prices are unlikely to take a breather soon, either.
So, when can we expect gas prices to go down?
Gas Prices Could Go Down During Autumn
A good bet for when gas prices will go down is the fall, if seasonal patterns hold up this year.
Before COVID-19 scrambled those patterns, gas prices would typically rise in spring, peak sometime around Memorial Day, ease a bit but stay high during the summer, then pull back sometime after Labor Day.
As post-pandemic life gets back to normal, that pattern could return this year. Heavy summer travel and the resulting heavy demand for gas are likely to ebb by late summer or early fall as kids go back to school. By then, the Federal Reserve’s interest rate hikes will have had some time to slow the overall economy, which should weigh on oil demand, too. OPEC should be pumping more oil then, as will the U.S., continuing the slow rebound in production from the pandemic-induced slump.
That might not be much comfort to motorists as they pay for expensive fill-ups this spring and summer. But unless an economic recession comes along soon and crimps demand for fuel in painful fashion, high gas prices probably won’t go down anytime soon.
- SEE MORE The 22 Best Stocks to Buy for 2022
Stock Market Today: Stocks Suffer Worst Losses of 2022
The major indexes wiped out yesterday’s relief-rally gains and then some Thursday in a market-wide rout as Wall Street took a more sober look at the investing landscape.
For one, most of the worries hanging over stocks haven’t disappeared, including on the interest-rate front. While Federal Reserve Chair Jerome Powell did dismiss the idea of a 75-basis-point hike yesterday, the expectation is for at least two more 50-basis-point hikes at the next two Federal Open Market Committee meetings â a still-considerable level of monetary tightening.
- SEE MORE The 25 Cheapest U.S. Cities to Live In
“We are still not out of the woods yet, as there is still too much uncertainty over how the Federal Reserve’s actions will tame inflation without causing a recession,” says Zach Stein, chief investment officer of climate change-focused investment manager Carbon Collective.
Indeed, the yield on the 10-year Treasury, which retreated yesterday, roared back to life Thursday to eclipse 3% once more. That weighed particularly hard on rate-sensitive growth places in tech and tech-esque stocks such as mega-caps Tesla (TSLA, -8.3%), Nvidia (NVDA, -7.3%) and Apple (AAPL, -5.6%).
Speculative assets such as cryptocurrency went heavily risk-off, too; Bitcoin, for instance, plunged 8.9% to $36,287. (Bitcoin trades 24 hours a day; prices reported here are as of 4 p.m.)
Gene Goldman, chief investment officer of Cetera Investment Management, pointed to additional drivers for Thursday’s woes.
Sign up for Kiplinger’s FREE Investing Weekly e-letter for stock, ETF and mutual fund recommendations, and other investing advice.
“There is less optimism around the less hawkish Fed and the softish landing scenario,” he says. “We saw data this morning portraying more inflation and a weaker economy â labor costs surged in Q1, unemployment claims rose, and productivity was weaker than expected.”
Goldman also pointed to disappointing earnings reports from the e-commerce industry, which, because of high valuations to boot, were selling off particularly hard.
- SEE MORE The 15 Best Value Stocks to Buy Right Now
Shopify (SHOP), for one, plunged 14.9% after the e-commerce company reported lower-than-expected adjusted earnings and revenue in its first quarter (20 cents vs. 63 cents est.; $1.2 billion vs. $1.24 billion est.) and projected soft revenue guidance in the first half amid tough comparisons. SHOP also said it will buy San Francisco-based fulfillment startup Deliverr for $2.1 billion.
“Although e-commerce growth was below our view, SHOP is lapping pandemic figures, with comparisons to get more favorable exiting the calendar year,” says CFRA Research analyst Angelo Zino (Hold). “That said, we do think consensus expectations will need to be tempered, partly reflecting lower than expected merchant additions to start the year.”
eBay (EBAY, -11.7%) spiraled lower despite topping first-quarter estimates after it forecast second-quarter revenues of $2.35 billion to $2.40 billion and adjusted earnings of 87 to 91 cents per share, both under expectations for $2.54 billion and $1.01 per share, respectively. Etsy (ETSY, -16.8%), meanwhile, slightly beat revenue expectations but was merely in-line on profits and forecast Q2 sales of $540 million to $590 million, falling far short of the $627 million analyst mark. Amazon.com (AMZN) bled 7.6% in sympathy.
The result was the worst single-session performance of 2022 for both the Nasdaq Composite (-5.0% to 12,317) and Dow Jones Industrial Average (-3.1% to 32,997), while the S&P 500 (-3.6% to 4,146) was just a hair shy of outdoing its marginally larger decline April 29.
YCharts
How low could we go from here?
Well, a bear market (a 20% drop from highs) would mean about 3,850 for the S&P 500, and John Lynch, chief investment officer for Comerica Wealth Management, thinks the index could scrape that figure.
- SEE MORE Stock Market Trading Hours: What Time Is the Stock Market Open Today?
“Bear markets without recession tend to be short and shallow,” Lynch says. “It’s conceivable the S&P 500 needs to establish a bottom in this 3,850 to 4,000 range. Without recession in 2022, which is our base case, stocks can resume higher as equity investors discount cyclical recovery in an environment where monetary policy is no longer shepherding expensive growth and technology names at a multiple of sales.”
Other news in the stock market today:
- The small-cap Russell 2000Â dropped 4.0% to 1,871.
- U.S. crude oil futures eduged up 0.4% to settle at $1081.26 per barrel.
- Gold futures gained 0.3% to finish at $1,875.70 an ounce.
- Booking Holdings (BKNG) was a rare splash of green today, adding 3.3% after the online travel company reported earnings. In its first quarter, BKNG reported earnings of $3.90 per share on $2.7 billion in revenue, more than the 85 cents per share and $2.5 billion analysts were expecting. The company also posted gross bookings of $27.3 billion, a record quarterly amount. “We have a favorable view of online travel companies, and particularly of BKNG given its focus on Europe, where it generates most of its gross profit,” says Argus Research analyst John Staszak (Buy). “BKNG is trading at a projected 2022 price-to-earnings ratio of 20.2, below the average for other online booking companies; however, we believe that it merits a higher multiple given the company’s strong earnings outlook.”
Warren Buffett Splashes More Cash
Warren Buffett is spending like there’s no tomorrow. A Wednesday evening regulatory filing from Berkshire Hathaway (BRK.B, -2.5%) revealed that the Oracle of Omaha’s holding company bought $350 million shares in energy firm Occidental Petroleum (OXY, +1.2%).Â
- SEE MORE Now You Can Own Bitcoin in 401(k)s. Should You?
The Berkshire Hathaway equity portfolio has plumped up on Occidental exposure in recent months â Buffett revealed a nearly 10% OXY stake in early March that now sits at 15.2%, and he also owns $10 billion worth of 8% preferred stock, as well as 84 million warrants to purchase OXY stock. The move is part of Buffett’s renewed buying interest in energy that has seen Chevron (CVX) become Berkshire’s fourth-largest holding.
All of this falls under an even larger underlying theme, which is that Buffett has gone from being a voracious seller in 2021 to buying everything that isn’t tied down this year. Part of that seems to be the Oracle taking advantage of a considerable dip in the market. But a closer look at what Buffett’s buying signals that he, like the rest of us, has rapidly rising prices on the brain.
We recently talked to noted Buffett expert David Kass about the Berkshire CEO’s recent binge, and how much of Warren Buffett’s activity has been connected to inflation.
- SEE MORE Sell in May and Go Away? Here We Go Again …
Save Big Bucks By Being A One-Car Household
This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.
The Cheapest Neighborhoods in Las Vegas for Renters in 2022
If you want to have some adult fun, Las Vegas is the place to go! But many people are looking
The post The Cheapest Neighborhoods in Las Vegas for Renters in 2022 appeared first on The Rent.com Blog : A Renterâs Guide for Tips & Advice.
Use Our Ultimate Guide on How Much to Tip
Ever wondered how much to tip? The Penny Hoarderâs ultimate guide to tipping will tell you everything you need to know, from who to tip and how much.
This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.
15 Money Tips for Traveling Abroad That Will Save Your Budget
This Car Comparison Spreadsheet Will Help You Find a Deal
Buying a car can be a stressful experience. Itâs a big decision with a ton of little decisions roped in â new or used? Car or truck? Cloth or leather? gas or electric? Not to mention, thereâs way too much information floating around on the internet, making it challenging to compare your options. But donât [â¦]
This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.
4 Car Stocks That Have the Pros Revved Up
The adoption of electric vehicles (EVs) in comparison to internal combustion engine (ICE) vehicles has increased exponentially, fueled by government incentives and a friendly regulatory environment. This has resulted in even legacy car stocks going electric in a big way.
This transition from fossil-fueled cars to going electric got a big boost in 2021 when President Joe Biden signed an executive order targeting 50% of all new passenger cars and light trucks sold in the U.S. should be electric by 2030.
- SEE MORE The 22 Best Stocks to Buy for 2022
But the industry has more recently been hampered by familiar pandemic woes, including supply-chain constraints impacting production and rising inflation being a key concern even as demand continues to be strong for these vehicles.Â
If this was not enough, the Chinese government imposed strict lockdowns across major Chinese cities like Shanghai to contain a wave of COVID-19. This has led to production halts at many key plants for EV manufacturers, which is only compounding a pre-existing automobile chip shortage.
Despite these short-term hurdles, the long-term implications for these car stocks is evident. EV sales hit 6.75 billion units in 2021 â more than double what they did in 2020, according to electric vehicle data site EV-volumes.com. While the impressive growth rate was due in part to easy year-over-year comparisons, expectations are for nearly 41% more EVs to be sold this year compared to last.
But which car stocks are poised to capture this growth? To answer that question, we used the TipRanks database, which allows investors to evaluate stocks using a variety of criteria, including analyst ratings and price targets.
Here, we’ll look at four popular car stocks and see what the pros are saying about each one. Each of the names featured here boasts mostly Buy or better ratings from analysts and each offers significant upside potential to current levels based on their consensus price targets.
- SEE MORE The Best (And Worst) Stocks for Rising Prices
Data is as of April 17.
How to File Your Taxes for Uber, Lyft and Other Popular Gig Apps
Tax Day 2022 is closing in, and the burden for gig workers is a little heavier because youâre considered independent contractors â not employees â of the popular app-based companies you work for. After two years of filing extensions because of the pandemic, weâve returned to a more familiar April deadline. The deadline to file [â¦]
This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.