ABOVE: Dan Celia, national radio and TV host of Financial Issues appeared on the Monday afternoon edition of CBN's Newswatch to talk about Russian President Vladimir Putin's move against the world's oil markets and how it will affect the economy. Newswatch is seen weekdays on the CBN News Channel. For a programming schedule, click here.
The coronavirus hit Wall Street so hard this morning that trading curbs had to be invoked after stocks plunged seven percent in just a few minutes as trading opened.
Whenever there's a sudden plunge like that, it sets off an automatic halt to trading for 15 minutes. When markets reopened this morning after the halt, stocks stabilized a bit, but the Dow has remained down by roughly 1,500 points since then.
If stocks plummet like that again, the curbs could go back into effect, and if they ever were to fall 20 percent the rules dictate that trading would be closed for the rest of the day.
Stocks partly took their downward cue from plummeting prices in the oil market after Russia and Saudi Arabia failed to come to an agreement to prop up prices over concerns that the coronavirus is hurting the global economy.
Russian President Vladimir Putin is playing a dangerous game with the world's oil markets, all to get revenge on President Trump.
"We are coming off incredibly volatile back-to-back weeks. It looks like we're headed for a third, now that the oil sector will continue to get pummeled because the OPEC meeting fell apart, with OPEC pursuing a total reversal and increasing production at a time when demand is down. I'm not sure Russia has made the right move in this chess game," said financial expert Dan Celia, host of "Financial Issues."
Bloomberg News reports Putin pulled out of his coalition with OPEC because he's angry with the Trump administration for using energy as a political and economic tool, including US sanctions that hurt Russian oil projects.
Russia's coalition with OPEC also helped America's shale oil industry and Russia's move to pull out will hurt that industry.
"Oil companies here in America will be reducing rig count dramatically, and we will start to see layoffs in the oil sector," Celia predicted.
"I know there is a bit of a frenzy in the media right now, but this is not a time to join with them," Celia added. "This is a time to sit still and not make any moves in your portfolio if you are a long-term investor. My greatest concern is that oil companies and some utility companies will begin cutting dividends, and this will hit income investors hard. If you are one of those, you should understand that there is no place to go, and best thing you can do is sit tight and maybe at some point down the road buy a few more shares to increase your income when the dividends start coming back into the markets. Stay tuned."
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