Heavy losses and declines in stock markets
Heavy losses and declines in stock markets
Investors took advantage of quarterly reports which were good in many companies so as to reap profits after stock exchanges recently hit high records.
US Federal Reserve also caused pressure on hopes that the economy will recover more quickly,
as US FR left its monetary policy trajectory unchanged.
This was matching with private data concerning new durable goods orders that were released a few hours ago and rose much less than what was expected in December.
Commerce Department announced that demand for durable goods grew on a monthly basis in December by 0.2% from +1.2%,
in the previous reading. Major durable goods orders increased by 0.7% from the previous reading, + 0.8%.
Commodity orders excluding defense assets rose by 0.5% from 1.2%.
Evest is following upmarket developments after this important data.
Oil is falling amid fears of declining demand from China
Today, oil prices fell during morning trading, despite a significant decline in oil inventories in the United States of America
as the rising US dollar and rising concerns about a decline in fuel demand due to travel restrictions
and delays in vaccination helped in putting more pressure on prices.
The cost of March North Sea Brent crude futures was $ 55.45 a barrel which was $ 0.36 at a rate of 0.65%,
less than the previous session’s closing price.
Crude fell by $ 0.1 and 0.2% to record $ 55.81 a barrel on Wednesday.
As for US West Texas Intermediate crude futures for March delivery, it registered $ 52.53 a barrel.
This is $ 0.32 at a rate of 0.61% less than Wednesday levels as it rose by $ 0.24 to reach 0.5% to record 52.85 a barrel on Wednesday’s session.
There are many fears regarding demand expectation, as Chinese authorities are urging their citizens to stop traveling during
Lunar New Year is considered the busiest tourism season of the year.
This by its turn, affects levels of demand.
There is an additional indication of a possible drop in demand from the United States as Los Angeles traffic
has sharply fallen over last month because of imposed restrictions in California.
According to US Energy Department’s weekly report, US oil inventories decreased by 9.91 million barrels during last week,
while gasoline inventories increased by 2.47 million barrels.
Gold falls after investors’ appetite for the dollar as a safe haven
Today, gold prices fell as investors flocked to the safe-haven dollar after a decline in World Stock markets in addition that,
Federal Reserve raised concerns regarding the pace of the economic recovery in the United States of America.
According to Reuters, spot gold fell by 0.5% to record $ 1835.35 an ounce.
Prices fell to their lowest level since January’s18 to trade at a rate of $ 1830.80 an ounce, yesterday.
IG analyst said that the market was very disappointed with Federal Reserve Bank as it got nothing regarding policy guidance or stimulus outlook,
therefore, risky assets retreated but the US dollar rose and gold was negatively affected by the green currency’s rally.
Federal Reserve said that the pace of recovery in economic activity and employment in the United States slowed
in recent months but kept key interest rates and monthly bond purchases unchanged.
What added to pressure on gold prices was the delay in the US $ 1.9 trillion stimulus package for relief from
Coronavirus Covid-19 which did not receive a green signal from Republicans so far.
The dollar hovered near its highest level in more than a week,
recorded during the last session as Asian stocks declined.
This led precariously due to selling and profit-taking in Wall Street.
A large decline in Wall Street related to companies announcing disappointing results… Asian stock markets are in the red area
New York Stock Exchange ended yesterday’s session at a significant low,
as Dow Jones lost 2.05% while S&P decreased by 2.57%.
Nasdaq Composite also fell by 2.61%.
Federal Reserve Bank confirmed interest rates in 0-0.25% range and warned that
speed of recovery and job market has eased in recent months,
besides vulnerabilities concentrated in the most affected sectors by the epidemic.
Microsoft shares rose by 0.25%, as tech giant topped $ 40 billion
through revenue in addition to 15 billion in profit for the first time in a quarter of a year.
During 3 months to December 31, net profit grew from $11.65 to record $ 15.46 billion.
On a rate basis, earnings per share rose from $ 1.51 to reach $ 2.3. Total revenue increased 17% yearly,
to reach 43.08 billion compared to 40.18 billion expected from the market.
AT&T shares were down 2.05%, as the telecommunications giant ended the fourth
quarter in adjusted earnings per share of $ 0.75 and revenues of $ 45.69 billion.
Analysts had expected earnings of $ 0.73 a share on revenues of $ 44.56 billion.
Starbucks shares fell by 6.51%, as the Coffee giant company announced last-quarter results,
marked by a decline in its net profit from $ 885.7 million,
equivalent to 74 cents a share to reach 622.2 million and 61 cents a share.
In the three months ending last December, Starbucks posted a 5% annual revenue
drop to record $ 6.75 billion which is down from the 6.91 billion that analysts had expected.
Boeing stocks were down in a range of 4.07%, as Aviation Industry Group recorded an adjusted loss for a share during
the fourth quarter which seemed to be well above expectations of $ 4.19 compared to expectations of $ 1.80.
In Europe, according to IG forecasts, UK FTSE is expected to start lower by more than 1% or 70 points today.
Today, in the Asia-Pacific region, shares fell after its falling overnight in Wall Street amid fears of escalating speculation.
In China, Shanghai Composite fell by 1.97%, while Hang Seng Index in Hong Kong was down to 2.3%.
Japanese Nikkei index fell out of 1.53% to 28.187 while South Korea’s Kospi was down 1.71%.
Shares were lower in Australia as S&P /ASX 200 closed down 1.93%.