How Exxon, Chevron's suffering stock affects your 401(k)
A collapse in oil is hurting retirement funds.
CME Group CEO Terry Duffy, during an exclusive interview, discusses the impact of the coronavirus.
Energy stocks are slipping deeper into a bear market as the Dow Jones Industrial Average suffered its worst single point drop, over 1,190 points, ever on Thursday on coronavirus fears.
Shares of oil giants Exxon Mobil and Chevron are in freefall. Exxon closed at the lowest level since January of 2007 and Chevron the lowest since April 2016 driven by the spiraling price of U.S. crude, which fell to the $46 per barrel level.
Just this week, S&P energy stocks have tumbled over 16 percent, as tracked by the Dow Jones Market Data Group.
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That drop is hurting mom-and-pop investors more than you might think.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| XOM | EXXON MOBIL CORP. | 121.78 | -0.12 | -0.10% |
| CVX | CHEVRON CORP. | 162.36 | +0.73 | +0.45% |
| I:DJI | DOW JONES AVERAGES | 44296.51 | +426.16 | +0.97% |
"Chevron and Exxon are part of the Dow 30, that [$46 per barrel oil] is having a big weight on these stocks," said CME Chairman Terry Duffy during an interview on The Claman Countdown. "So cheap oil one might think it is good at the pump but actually it hurts your 401(k) dramatically because these are part of indexes, not only the Dow but others," he noted.
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| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| CME | CME GROUP INC. | 229.04 | +2.48 | +1.09% |
The CME is the world's largest derivatives exchange trading commodities, futures, cash and other asset classes. Duffy did note the biggest weekly action is playing out in stocks and bonds ahead of oil.
EXXON GETS FRUGAL AMID WEAK RESULTS
Aside from the correlation between the oil giants and the falling price of crude, both companies reported fourth-quarter profits that disappointed Wall Street.
As for Exxon, Bloomberg reported the company has started scrutinizing employee travel plans with a focus on tighter cost controls.
Melissa Phillip/Houston Chronicle via AP
CEO Darren Woods is set to deliver a strategy presentation at the company's annual investor day on March 5.