Oil keeps rising and Powell’s speech pushes Wall Street toward the Green Zone

2022-03-03T18:49:11
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Oil keeps rising and Powell’s speech pushes Wall Street toward the Green Zone:Oil continues to rise as Russian-Ukrainian tensions increase,
giving markets a major chance to increase investments in the profit sector. 

Evest follows market developments in the following report.

Topics:

Oil keeps rising 

The gold is fixed

United States stock indices rise after Powell’s speech

Chicago Federal Reserve

The state of the labor market

 

Oil keeps rising 

Major foreign buyers are boycotting Russian oil because of the situation over Ukraine,
in an effort to find alternative sources of supplies, which are likely to drive up prices.

About 70% of Russian export oil finds it difficult to find buyers, according to consulting firm Energy Aspects.

According to Bloomberg, the Russian company Surgutneftegas had been unable to sell the oil for three consecutive days.

The cost of Brent crude futures for May on the London Stock Exchange ICE Futures on Thursday is $117.26 per barrel,
$4.33 (3.83%) higher than the closing price of the previous session. 

As a result of Wednesday’s trading, these futures rose by $7.96 (7.6%) – to $112.93 per barrel, the highest since June 2014.

The price of West Texas Intermediate oil futures for April ,
in electronic trading on the New York Mercantile Exchange (NYMEX) was $114.45 per barrel by this time,
$3.85 (3.48%) higher than the final value of the previous session.

On the eve of a $7.19 (7%) increase in the cost of these futures, to $110.6 per barrel,
the highest value at the closing session since May 2011.

The IEA’s decision to release 60 million barrels of oil from strategic reserves failed to allay market concerns.

According to experts: “There is a real concern that the market will face supply shortages.

If the situation in Ukraine deteriorates, we will see a further rise in the oil market. “

However, OPEC + countries do not intend to accelerate oil production,
and on Wednesday they decided to maintain the plan to increase production quotas in April by 400 thousand barrels per day.

Wednesday’s meeting showed that “the current fundamentals and consensus of the oil market,
point to a well-balanced market and that current volatility is due not to changes in market fundamentals, but to current geopolitical events.”

 

The gold is fixed

Gold prices were fixed on Thursday as risk appetite improved,
after the US Federal Reserve Chairman tried to allay concerns about sharp interest rate increases,
offsetting safe-haven demand spurred by the conflict between Russia and Ukraine.

Spot gold stabilized at $1,927.18 an ounce.

US gold futures rose by 0.4 percent to $1929.90.

Kharkiv, Ukraine’s second-largest city, was violently bombed on Wednesday as the United Nations denounced the week-long Russian invasion in a historic vote.

The largest attack on a European country since 1945 caused more than 870 thousand people to flee,

led to a barrage of sanctions against Russia and raised concerns that a wider conflict could erupt in the West that had not been contemplated for decades.

The new round of sanctions announced by the White House embargoes the export of certain refining techniques,
making it difficult for Russia to modernize its refineries.

Federal Reserve Chairman Jerome Powell said the central bank would “cautiously” start raising interest rates at its next meeting in March,
but that it would prepare to move harder if inflation did not cool down at the expected speed.

Wall Street made gains and U.S. 10-year Treasury yields rose on Wednesday.

Although gold is a safe investment during political and economic uncertainty,
it is very sensitive to rising American interest rates, leading to increased opportunities.

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United States stock indices rise after Powell’s speech

US stock indices ended trading on Wednesday with a confident rise after U.S. Federal Reserve Chairman Jerome Powell’s speech, according to MarketWatch.

The Dow Jones Industrial Index rose by 596.4 points (1.8%) to 33891.35 points.

Only Visa Inc stocks, out of 30 companies based on the index, showed a decline in price offerings, falling by 0.2% 

The Standard & Poor’s 500-day value jumped by 80.28 points (1.86%) to 4386.54 points.

The Nasdaq Composite Index rose by 219.56 points (1.62%) to 13752.02 points at the end of the session.

In a speech to the House Financial Services Committee,
he said that the Fed tended to raise the benchmark interest rate by 25 basis points at its March 15-16 meeting.

“I tend to propose and support an interest rate hike of 25 basis points. 

If inflation rises or remains on the rise, we will be prepared to be tougher and raise more than 25 basis points in one or several meetings.” Said Powell.

Markets now place a zero chance that the Fed will raise its prime rate by 50 basis points at its March meeting.

A week ago, market participants estimated this opportunity at 41%, according to CME FedWatch.

Chicago Federal Reserve

In the meantime, Chicago Federal Reserve (FRB) President Charles Evans said that the Fed was ready for a series of interest rate hikes,
but that domestic inflation was likely to remain above 3% throughout the year.

He noted that the Fed is ready to raise the rate from the current near-zero level at the next meeting,
to be held on March 15-16, as well as at subsequent meetings. 

Evans also said that the Fed would soon begin to shrink the balance sheet.

It now amounts to about $9 trillion,
with the Fed buying bonds during the Covid-19 pandemic to reduce long-term interest rates and support companies and consumers.

Job growth in the United States is 475000 in February, according to industry organization ADP Amplier.

Average analysts’ expectations suggest a less significant increase:
According to the findings of the Trade Economics Survey and 400 thousand respondents to the Wall Street Journal.

In the meantime, January data was accurately audited – an increase of 509 thousand compared to the previously announced reduction of 301 thousand.

The state of the labor market

On Friday, official data on the state of the labor market last month will be released.

Experts expect that the number of jobs in the country’s economy has grown by 378-440,
while unemployment has fallen to 3.9% 4% in January.

The fixed-price chain operator Dollar Tree reported a 9.7% decline in net income in the fourth quarter of the fiscal year,
which ended on January 29, while revenue rose by 4.6%, but fell short of expectations. At the end of the session,
the company’s stock prices rose by 0.15% after falling at the beginning of the trading.

Salesforce.com Inc, a provider of cloud-based enterprise customer experience solutions,
posted record fourth-quarter revenue (November-January), which was also above market expectations.

The company’s stock rose by 0.7%.

While movie chain operator AMC Entertainment reduced its net loss by just over seven times,
in the fourth quarter as the audience began to return to theaters.

The company’s value rose by 1.2%.

Ford Motor’s stock price rose by 8.4%.

The automaker cut sales in February by about 21% on an annual basis,
but the volume of new orders increased four times and reached a record high.

 

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