US debt concerns the markets Gold and oil stabilize

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US debt concerns the markets Gold and oil stabilize

US debt concerns the markets Gold and oil stabilize :The US debt crisis continues to dominate markets, especially with Republicans rejecting all the solutions that Democrats have proposed, which led to a major crisis in Wall Street. 

Evest follows all developments on the economic scene in the following report.


Oil rebounds amid forecasts of an energy crisis in Asia and Europe

Nikkei bucks the rising streak 

American indices are in the Red Zone and the market awaits inflation data

Developments in the United States national debt problem

Gold rises on increasing inflation concerns


Oil rebounds amid forecasts of an energy crisis in Asia and Europe

Oil prices stabilized on Tuesday near multi-year highs on expectations that the energy crisis in Europe and Asia will further boost demand.

Rising natural gas and coal prices in Europe and Asia, as well as declining energy reserves in the Northern Hemisphere before winter,
are forcing companies to actively use oil and petroleum products. 

Meanwhile, OPEC + countries continue to adhere to the previously agreed plan to restore production and gradually increase it.

Brent crude futures for December on the London Futures Exchange rose by $0.05 (0.06%), to $83.7 per barrel.

Brent rose $1.26 (1.5 percent) on Monday to $83.65 per barrel, the highest level since October 9, 2018.

West Texas Intermediate crude futures’ prices for November in electronic trading for the New York Mercantile Exchange (NYMEX) rose by $0.03 (0.04%), to $80.55 per barrel. 

In the previous session, the future had risen by $1.17 (1.5%) – to $80.52 per barrel, the maximum since October 31, 2014.

Brent crude has risen by about 20 percent since mid-August as the energy crisis began to worsen.

“If the price of oil gets close to $90 per barrel, OPEC could increase production even further and try to calm the market,”
said Wayne Gordon, UBS analyst AG Wealth Management.

Citigroup analysts raised their predictions for oil prices for the current quarter to $85 per barrel.

Experts believe the price is likely to jump to $90 with “increased demand, supply shortages,
business transition from gas to oil, and higher energy price growth this winter.”

Nikkei bucks the rising streak 

Stock indices in Asia and the Pacific show negative dynamics on Tuesday.

Japan’s Nikkei 225 lost 0.98%, and China’s CSI300 – 0.66%. US S&P 500 index’s futures fell by 0.48%.



American indices are in the Red Zone and the market awaits inflation data

US stock indices, which fluctuated sharply during Monday’s trading, ended the session in the Red Zone.

Columbus Day was celebrated in the United States the previous day, but the exchanges were operating normally.

But, in the meantime, US Treasuries were not traded.

The Dow Jones Industrial Index fell 250.19 points (0.72%) to 34496.06 points on Monday.

Standard & Poor’s 500 fell by 30.15 points (0.69%) to 4361.19 points.

The Nasdaq Composite Index lost 93.34 points (0.64%) to 14486.2.

Global interest rates, as well as commodity prices, remain the focus of traders’ attention.

According to analysts, the market is looking forward to a certainty for further movement.

Traders are waiting to publish US inflation data for September this week, along with reports of the country’s largest banks for the third quarter.

experts predict that average inflation in the United States in September will remain at the previous month’s level – 5.3%,
and inflation excluding food and energy – at 4%.

The upcoming third-quarter earnings season is expected to allow investors to gauge the companies’ vulnerability to factors such as rising inflation,
supply chain problems, labor shortages and rising energy prices.

Wall Street analysts expect third-quarter S&P 500 earnings to rise 28% on an annual basis.

JPMorgan Chase & Co., which will publish its quarterly earnings on Wednesday, October 13, fell by 2.1% on Monday. 

Stock prices for Citigroup, Morgan Stanley, Bank of America and Wells Fargo rose by 0.9%, 2.8%, 1.3% and 1.5% respectively.

These four banks will publish their financial statements for the past quarter on October 14.

Other major companies that will publish quarterly earnings this week include Delta Airlines, United Health Group Inc. and Domino’s Pizza.


Developments in the United States national debt problem

Traders continue to follow developments in the US national debt ceiling problem,

which was postponed until the end of this year after interim measures were approved by both houses of US Congress.

US Treasury Secretary Janet Yellen said Sunday that it would be a “disaster” if Republicans refused to agree to raise the country’s national debt limit in December.

She also considered it necessary to completely abandon the United States national debt limit, which in recent years had often become a political instrument.

Merck & Co’s stock price fell by 0.9%.

The pharmaceutical company announced on Monday that it had sent a request to the Food and Drug Administration for emergency use approval of a COVID-19 coronavirus drug.

 Gold rises on increasing inflation concerns

Gold prices rose on Tuesday, backed by growing inflation concerns,
although gains culminated in the strong dollar and the US Federal Reserve expected to announce a cut in its bond purchases in November.

Spot gold rose by 0.3% to $1758.25 an ounce, while US gold futures rose by 0.1% at $1758.20.

On the other hand, the dollar approached its highest level in the same year as it was approached in September amid rising energy prices and expectations that the Fed will soon begin to normalize policy.

The yield on 10-year US Treasury bonds peaked since early June.

Gold is often seen as a hedge against inflation, but low central bank stimulus and higher interest rates tend to push up government bond yields,
which translates into a higher chance of retaining non-interest-bearing alloys.