Strong support for stock markets and oil is still suffering
Strong support for stock markets and oil is still suffering
Strong support for stock markets and oil is still suffering: Two days after the meeting, the results of the Federal Reserve were as expected, by maintaining levels of interest rates unchanged.
This supported stock markets all over the world.
Evest continues to follow up the echo of these results on markets.
Oil completes its bearish march
Oil prices continued to fall today after the US Department of Energy announced increasing in oil reserves in-country for the fourth week in a row.
Brent crude futures
The cost of Brent crude futures for May on the London Stock Exchange for futures reached $ 67.59 a barrel,
which is less than $ 0.41 (0.6%) for the price of closing in the previous session.
On Wednesday’s session, these futures fell by $ 0.39 (0.6%) to trade at $ 68 a barrel.
West Texas Intermediate crude oil futures
The price of West Texas Intermediate crude oil futures for April in electronic trading on the New York Mercantile Exchange ( NIMEX) reached $ 64.22 a barrel.
This was $ 0.38 (0.59%) below the level of closing in the previous session.
On Wednesday, the value of these contracts declined by $ 0.2(0.3%) to record $ 64.6 a barrel.
Also on Wednesday, the US Department of Energy announced that US oil inventories increased by 2.4 million barrels last week.
Experts interviewed by Bloomberg predicted an increase in oil reserves by 2.7 million barrels,
according to a survey by Standard & Poor’s Global Platts, an increase of 400.000 barrels.
Despite the US Department of Energy’s “downward” data, the market remains optimistic about oil demand prospects,
according to Standard & Poor’s Global Platts.
Vaccination against the Covid-19 virus provides hopes to control the epidemic as global economic activity gains momentum.
There are concerns about vaccinations in Europe especially after a suspension of the AstraZeneca vaccine in some countries. However, analysts expect an increase in traveling and demand for gasoline and aviation fuel in the United States of America as a result of successful vaccinations.
Dow Jones and Standard and Poor’s 500 achieve new records
Yesterday, US stocks closed at a high price, when Dow Jones and Standard and Poor’s 500 reached their highest levels at all.
Stocks have been supported through the results of the Federal Reserve meeting.
As expected, Central Bank has not changed monetary policy standards, while significantly improving economic prospects.
Thus, the GDP growth estimate in 2021 was raised to 6.5% from 4.2%,
while expectations of unemployment rates fell by 4.5% from 6.4%, at the end of the year.
As for inflation, it is expected to rise to 2.4%by the end of 2021, above the Federal, s target of 2%. However,
the surplus will not last long, as in 2022, inflation will decrease below the target level.
Federal Reserve Chairman, Jerome Powell also stressed that American monetary policy will remain very soft for a long time to come. Members of the Federal Open Market do not expect an increase in main interest rates till the end of 2023.
The US Department of Commerce
In terms of statistics, the US Department of Commerce stated that the number of houses launched in the United States in February decreased by 10.3% compared to the previous month, reaching 1.421 million at an annual rate.
AS observed, the decline was associated with very cold weather in many parts of the United States,
as it had a very negative effect on construction activity in last month.
The Industrial index
As a result of trading, the Dow Jones Industrial index rose by 0.58% to record 33.015.37 points.
Boarder Standard and Poor’s 500 index rose by 0.29% to record 3974.12 points,
while Nasdaq Composite for high technology rose by 0.40% to reach 13.525.20 points.
United States government long-term bond
United States government long-term bond yields remained high during the Asian session,
as investors of stocks chose to focus more on inflation expectations.
US government’s ten-year bond returns rose by 1.6550%, not far from their highest level since January, last year.
The difference between bond returns for 2 years and 10 years basis points,
was near the highest level since August 2019.
McDonald’s fast-food shares rose by 1.9%, as analysts in Deutsch Bank raised their fair value estimates and improving their recommendations for buying shares.
Lennar Construction Company, which recorded better revenues than expected and modified profits for the first quarter,
rose by 13.8%, while Lands END retail shop, which also recorded a better quarterly financial statement than expected, rose by 9.7%.
Meanwhile, Developed Bilge Power for fuel cells dropped by 7.9%, after the company announced that it would repay its financial statements for 2 fiscal years 2018 and 2019, as well as some quarterly results for the fiscal year 2020.
Apple for iPhone industry decreased the value of its share by 07%.
Asian stocks are in the green area
The most important stock markets in Asia recorded significant gains in prices, today, as the possibility of continuing extremely expansionism monetary policy by the US Federal Reserve provided momentum not only in the United States but also in Asian stock markets too.
Today, Asian stocks rose after US Federal Reserve Board pledged to maintain its recent monetary policy yesterday and it also expected a hard jump into US economic growth this year, as the Covid-19 crisis declined.
Asia and Pacific MSCI index
Asia and Pacific MSCI index rose by 0.99%, while China’s leading stock index rose by 0.46%.
Australian main index decreased by 0.3%, during today’s trading.
In Japan, the major Nikkei 225 index closed at 1%,
while E-MINI futures in S&P 500 index rose by 0.3%.
South Korea and Hong Kong
Main stocks in South Korea and Hong Kong jumped by more than 1% each,
following the powerful Wall Street session yesterday.
DAX may reach a new record level
Today, experts expected that the German Pioneer DAX index to achieve a new record,
like 2 hours before trading, it was evaluated by an increase of 0.7%, to trade at 14700 points.