Posts

Short Overview of main Weekly deals & economic events

, ,

United States

Nasdaq and S&P 500 overcame the last week’s losses. They were at the record levels on Friday’s closing, observing the period of two weeks. Strongly supported by the surge in tech stocks, as well as the political unrest which is taking place in U.S. these days.

 

OPEC & Oil

OPEC and non-OPEC countries have made a deal to extend production cuts for a period of nine months, until March. The deal was made on Thursday. The idea of extending the glut came after the output cuts agreed in November last year failed to rein in the glut in supply. Which has pressured oil prices for nearly three years.

Most of the market participants were expecting deeper cuts. So when the meeting started, prices sharply fell right away, which did not leave the traders impressed. The expectations on Cartel were a bit firmer & OPEC was expected to announce deeper cuts.

However, in order to rebalance the market, OPEC must take wise further steps. Also, observing it relations with with non-member countries, they should become closer.

 

Base Metals

 

Firstly, copper prices on LME closed the day on Friday May 26 below their previous closing prices. They have fallen back from three-week highs earlier.

Three-month copper closed the day at $5,657 per tonne. Coming from its previous closing price of $5,724.

Secondly, copper prices rose earlier on news of the escalating 2 month long strike at the Grasberg mine – the world’s second largest for copper. Where strikes are set to roll into a second month over June. But prices fell back again by the close.

Thirdly, aluminium prices traded loosely flat throughout the day. They dipped at the close to $1,951 per tonne after closing the day on Thursday at $1,960. Aluminium stocks saw a 31,975-tonne injection in South Korea on Friday. Such a move could see prices trade lower, despite the spectre of Chinese cuts hanging over the market.

“While questions remain around the efficacy of proposed Chinese capacity cuts, with the bears pointing to high semi exports as signs that production has actually increased, there is no questioning the buy momentum,” (Alastair Munro)

At friday’s close, the three-month prices of base metals were:
Nickel closed the day at $9,080 per tonne, from its previous closing price of $9,040. Zinc closed at $2,640 per tonne, up from $2,633. Lead closed the day higher at $2,122 per tonne, from $2,084. Tin prices closed at $20,425 per tonne, from $20,400 in Thursday.

 

Brazil’s Vale plans to diversify

 

Fabio Schvartsman, CEO of Vale SA, said that world’s largest iron ore miner plans to resume growth with diversification. And some acquisitions also.

Reporters and market analysts explained that Friday said Schvartsman means to avoid keeping “all eggs in one basket.” Speaking about the firm’s strong reliance on iron ore.

The company is doing a detailed analysis to decide on which operations to expand. For example, its nickel business is not gaining enough profit returns.

Schvartsman has set up working groups in Company, to find out the risks and returns which every of these units gain. The first assessment is to happen in 60 days.

For advises on cost-cutting efforts, Vale has also found a solution. It hired Brazilian consultancy firm Falconi to advise them and help them deal with cost-reduction.

 

/0 Comments/by

A Brief summary of market movement this week:

 

Wednesday, May the 17th was the day when U.S. stocks felt the worst decline of 2017. The world’s top investors survived huge risks and have lost the amounts of money, due to reports that came out about President Trump, and the market movements which followed.

Observing the indexes, The Dow definitely had the worst story. Speaking of, it have lost 370 points, or 1.78%. While the NASDAQ ans S&P 500 also declined for more than 1,5%. The non so likable thing, is that the three most important U.S. indexes finished the week lower. In negative.

Gold futures 2% up

Meanwhile, investors have found their ”way out” of the bad Wednesday, relying on gold. And piling their money in safe assets.

Most noteworthy, the current political drama is happening in Washington. The President Trump’s bad branding which is forthcoming, put some doubts on his Politics, ideas and plans for the future steps.

Gold futures gained about 2% for the week. Which makes it the very best performance of this precious metal in 5 weeks.

 

Oil prices; real positive expectations

Speaking about the Oil prices, they were oscillating around 50$, gaining levels of 53.30 and a bit more, amid expectations that OPEC is going to extend the cuts. Crude futures followed the levels of 50$ at Friday’s close. The rising expectations  for OPEC to prolong the supply cuts is leading prices up. And it will have its greatest impact after May the 25th.

Noureddine Boutarfa  Algerian Energy Minister, said that all the ally OPEC and most non-OPEC countries support the output cuts. So they would likely impact the market, and push the OIl prices up.

 

 

Sterling hits highs  

 Thursday was the day when pound of sterling survived a mini crash against the dollar, falling to the level of $1.2888. This move was not so expected, because in fact it is not relied to any economic event. Or any important market data. But the dip in pound was very brief. As GBP/USD later recovered.

And reached the level above 1.30$. Which was definitely the highest since September. This impacted the markets, and the investors pockets, and later it showed that the UK retail sales went up more than expected in April.

 

The dollar drops

The U.S. dollar index fell by more than 0.70% on Friday.

The dollar shakes are the most important ones. Political drama happening in U.S. had affected the market during the week. It actually erased almost all the earnings brought by President Trump’s election. The economy is throwing a doubt on President Trumps ability to reform the policies. He promised to deliver the reforms on pro-growth economic agenda. Which is including deregulation in financial markets and the tax reform also.

 

/0 Comments/by