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Stocks fell after JPMorgan Chase CEO warns of recession, Cathie Wood warns Fed it’s raising rates too high and risking economic “bust,” California accuses oil industry of price gouging, PayPal stocks drop after policy gaffe, and more financial news.
Stocks took a further dip on Monday after JPMorgan Chase CEO Jamie Dimon warned the United States is likely to enter a recession within the next 6 to 9 months. Dimon made the comments during an interview with CNBC. He said he believes Europe is in a recession already and that the US is probably next. Shortly after Dimon’s comments, the Dow fell more than 200 points, before rebounding to end the trading day down nearly 95 points, or 0.3%, CNN reported.
Ark Invest’s Cathie Wood wrote an open letter to the central bank on Monday arguing that the Fed is likely making a mistake in its aggressive stance against inflation, CNBC reported.
“The Fed seems focused on two variables that, in our view, are lagging indicators – downstream inflation and employment – both of which have been sending conflicting signals and should be calling into question the Fed’s unanimous call for higher interest rates,” Wood wrote.
“Could it be that the unprecedented 13-fold increase in interest rates during the last six months – likely 16-fold come November 2 – has shocked not just the US but the world and raised the risks of a deflationary bust?” Wood continued.
“Without question, food and energy prices are important, but we do not believe that the Fed should be fighting and exacerbating the global pain associated with a supply shock to agriculture and energy commodities caused by Russia’s invasion of Ukraine,” Wood added.
Last week, California’s Energy Commission (CEC) demanded oil refinery executives explain why, despite declining crude oil prices, gas prices have spiked, FOXBusiness reported. It’s worth noting that California has the second-highest gas tax in the US.
“Crude oil prices are down and industry profits are up, yet gas prices have increased by a record $0.84 per gallon in 10 days in California – a $2.50 difference compared to U.S. prices,” CEC Chair David Hochschild wrote in a letter. “This degree of divergence from national prices hasn’t happened before, regardless of planned or unplanned refinery maintenance, and no explanation has been provided. The oil industry owes Californians answers.”
Valero’s Vice President of State Government Affairs, Scott N. Folwarkow, responded by denying any allegations of “price conspiracies” among oil refineries and pointed out that a federal judge has thrown out another case finding no basis for them. Instead, Folwarkow reminded California of its own regulations, saying that the state is “most expensive operative environment in the country and [being] a very hostile regulatory environment for refining.”
“California policy markers have knowingly adopted policies with the expressed intent of eliminating the refinery sector,” Folwarkow said. “California requires refiners to pay very high carbon cap and trade fees and burdened gasoline with cost of the law carbon fuel standards.”
Folwarkow stated that California’s policies have prevented lower operating costs for refineries.
PayPal stocks took a tumble after social media lit up over the weekend after accidentally leaked documents revealed the company was considering fining its users $2,500 per offense for advancing “misinformation.” After the scheme was leaked, PayPal walked it back and said the announcement went out in error.
The self-inflicted wound sent PayPal stock trading back to its September lows around $84, The Street reported. As of 9 AM EDT on Tuesday, the company’s stock was trading at $84.52.
