Evergrand’s problems are still disturbing the markets and positive week for oil and US indices

2021-09-27T10:17:26
Evergrand Evergrand's problems Oil Wall Street
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Evergrand’s problems are still disturbing the markets and positive week for oil and US indices

Evergrand’s problems are still disturbing the markets and positive week for oil and US indices: The situation in global markets has stabilized, in particular, US stock indices

. Having opened on Friday at a moderately low level, it later managed to post slight gains. In turn, after a domestic correction in the first half of Friday, oil prices also turned higher.

Evest follows all developments in the trading markets in the following report:

topics:

Oil is rising to record levels

Banks expect oil prices to rise

Evergrand’s problems don’t end

US monetary policy supports the dollar against the euro

Mixed dynamics in Asia and negative dynamics in Europe

positive week in Wall Street  And Facebook and Tesla support the rise of the Dow Jones and Standard & Poor’s

 

Oil is rising to record levels

Oil prices boosted their growth in Friday’s trading.

The cost of Brent oil futures for November on the London Stock Exchange ICE Futures is $78.1 per barrel, $0.85 (1.1%) higher than the closing price on Thursday.

The price of Brent has not risen above $78 per barrel since October 2018.

West Texas Intermediate crude oil futures for November were traded in electronic trading for the New York Mercantile Exchange (NEMX) at a 10-week limit of $74.14 per barrel,
$0.84 (1.15%) higher than their value. 

The market was supported this week, in particular, by data on last week’s decline in US oil inventories to its lowest level since 2018.

“In the short term, inventory levels in the United States and the world will support oil prices as they continue to fall rapidly,”

said Robbie Fraser, an analyst at Schneider Electric.

The number of oil platforms operating in the United States rose by 10 units last week, to 421platforms,

according to data from US oil field service company Baker Hughes released on Friday.

Currently, the operating facilities are 238 more than the previous year.

 

Banks expect oil prices to rise

Bloomberg wrote that a shortage of natural gas supplies in Europe could affect the entire energy complex in winter.

Goldman Sachs expects oil prices to rise to $90 per barrel.

In the meantime, Bank of America experts predict that oil production in the United States next year will increase by 800 thousand barrels per day.

In this case, the US will become the fastest-growing non-OPEC + oil producer, according to the Financial Times.

Bank of America said that the growth of production in the United States would affect the balance of supply and demand in the world market,
thereby alleviating experts’ concerns about potential supply shortages. But bank experts believe that even in the event of a rapid increase in US companies’ production,
this will not disrupt oil’s rally.

Evergrand’s problems don’t end

In the middle of Friday, global investors were pressured by the debt problems of one of China’s biggest developers,
Evergrand Group.

Hengda Real Estate’s main department paid interest on its domestic bonds on Thursday. 

However, Western media reported that foreign Evergrande bondholders had not yet received their payments, totaling $83.5 million.

The developer can make payments later: The company has a grace period of 30 days default. 

The main concern of the tradesmen is that if the company is still unable to make interest payments,
the foreign holders of Evergrand bonds will suffer losses.

This will raise questions about their financial viability and may lead them to start selling their other assets to raise funds.

 

US monetary policy supports the dollar against the euro

The US dollar has greater advantages over the single European currency through the differences in monetary policy approaches of the Federal Reserve and the European Central Bank,
which will contribute to its strengthening in the medium term. 

The Fed is already preparing to end its quantitative easing program with the possibility of an increase in the key rate in 2022,
while the ECB may maintain a “super-soft” approach to monetary policy for a long time and as a European regulator,
Christine Lagarde said today, the recent rise in inflation in the eurozone was due to temporary factors and is expected to slow next year to 1.7%, so inflationary pressures in the European region are not the same.

Mixed dynamics in Asia and negative dynamics in Europe

On Friday, index dynamics in Asia were mixed, with Japan’s Nikkei index rose by 2.1%, China’s Shanghai Composite index fell by 0.8%,
and Hong Kong’s Hang Seng index losing 1.3%.

Indices in Europe were negative, with the FTSE, DAX and CAC 40 indices falling by 0.4-1٪.

positive week in Wall Street And Facebook and Tesla support the rise of the Dow Jones and Standard & Poor’s

The Dow Jones and Standard & Poor’s 500 indices rose on Friday and ended a tumultuous week with slight rises,
backed by gains from Tesla and Facebook, which offset Nike’s collapse.

Nike stocks declined 6.3 percent and were the biggest drag on the Dow Jones and Standard & Poor’s 500 indices after its pessimistic sales forecast and warning of delays during the holiday shopping season, blaming the supply chain crisis.

The stocks of footwear retailer Foot Locker Retailer have also fallen sharply.

On the other hand, Facebook rose 2 percent and Tesla rose 2.7 percent.

Standard & Poor’s telecommunications services sector jumped 0.7 percent and was the second-largest sector gain of the day after the energy sector, up 0.8 percent.

Stocks rebounded from sharp sales at the beginning of the week,
partly linked to concerns about Evergrand defaults and the risks it could pose to global financial markets.

The Dow Jones Industrial Index rose 33.18 points or 0.1 percent to 34798 points,
Standard & Poor’s rose 6.5 points or 0.15 percent to 4455.48 points, and the Nasdaq Combined declined 4.54 points or 0.03 percent to 15047.7.

Over the week, the Dow Jones index rose 0.62 percent, Standard & Poor’s rose 0.51 percent, and Nasdaq 0.02 percent.

 

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