Stocks down in Wall Street – crude oil up

Stocks continued their downward trend in Wall Street on Friday. The S&P 500 -index ended down by 2,33% and Dow Jones -index 2,24 % . The tech-intensive Nasdaq ended down 3,05%. Concerns over the global trade, oil prises and slower growth in US jobs in November were the topics.

The crude oil surged nearly 6 % as the Opec agreed more than expected production cuts. The Opec members agreed to cut the production by 1,2 million barrels a day.

This week for the stocks markets have been very volatile and the uncertainty over the Brexit vote in the British Parliament on the 11th December, global trade talks between the US-China and the moneraty policies in different continents have been the major news affecting the market sentiment.

According to Bloomberg News, the investment bank JP Morgan estimates that the US stocks can surge 17 % next year. The bank says the estimate is based on the fact that hedge funds hold fewer stocks than normal and returning to average holding would mean 500 billion dollars into US equities.

In Europe, the stock markets ended mixed. In London, the FTSE 100 -index was up 1,10 % to 6778, in Frankfurt the stocks declined sligthly by 0,21 % to 10788 and in Paris the CAC 40-index ended up by 0,68 % to 4813.

In Asia the stocks were also mixed. In Tokio, Japan, the stocks ended up 0,82 % to 21 687 points, but in Hong Kong the Hang Seng index ended down 0,35 % to 26063.

During one month period only the Hong Kong and Shanghai stock exchanges have been on positive trend. The other markets are in red ranging from the New York Nasdaq – 7,95 % to Tokio Nikkei -2,45%.

The euro was up 0,04 % to 1,13 US-dollars, but the UK sterling was down by 0,43 % to 1,272 US-dollars.

 

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Wall Street down – trade talks and yield in focus

Wall Street fell sharply onTuesday due to the new concers over the US China trade talks and the Treasury yield curve.

According to markets, the Treasury 10-year yield curve, which indicates the coming recession, was one of the market concerns and the 10-yield hit its lowest value since September. The demand for longer-dated Treasuries rose.

Also President Donald Trump said on Tuesday that if the countries cannot solve the trade issues and differences, he is a “tariff man”.

Dow Jones fell 2,66 % and was 25 138 points. S&P 500 index fell 2,17 % to 2729 points and Nasdaq dropped 3,21 % and ended at 7202.

In Europe the decline was modest. In London the FTSE100  fell 0,56 % to 7022 points and German Dax-index 1,14 % to 11 335. In Paris the CAC40 -index ended down 0,82 % and was 5012. In Asia the stock markets were mixed and for example in Hong Kong the stocks rose 0,29 % , but in Tokyo the markets fell 2,39 %.

The UK Parliament was having Brexit discussions and the Parliament voted about the legal advice related to the topic. The outcome was that the Goverment will have to publish the full disclosure of the Brexit legal advice.

Euro and sterling ended slightly down and euro was 1,1341 dollars and sterling 1,2716 dollars.

The US stock and bond markets will be closed on Wednesday.

Business Finance

G20: US and China to halt tradewar

During the G20 meeting in Argentina the US and China leaders, President Mr Donald Trump and China President Mr Xi Jinping agreed to halt the escalating trade war.

According to the White House spokesperson,  President Trump would not follow through his threat to raise tariffs on Chinese goods from 10% to 25% in the new year.  This has been the major issue in the discussions and also one of the biggest threats to global economy.

The countries also agreed that China will buy more agricultural, energy and industrial products from the United States. The aim is to reduce the trade imbalance between the countries.

According to White House, this new statement gives both countries 90 days time to agree upon new trade terms. If such agreement is not ready, the former tariffs increase from 10% to 25 % will become into force.

The financial markets ended up in Wall Street on Friday evening. Dow Jones ended +0,79 % to 25538, S&P 500 + 0,82 % to 2760 and Nasdaq 0,79 % to 7330 points. In Europe the markets were down with the FTSE 100 -index -0,83 % to 6980 and German Dax-index -0,36 % to 11 257 and CAC 40-index in Paris -0,05% to 5003.

Euro declined 0,67 % to 1,13 US-dollars and UK sterling ended down 0,33 % to  1,27 US-dollars.

Business

Brexit: May on tour – vote day the 11th Dec

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The British Prime Minister Theresa May has been on tour in order to engage with the Brexit-deal. Today she has been in the Northern Ireland and Wales as part of her campaign. Her message is the same as was released on Sunday in the EU leaders meeting in Brussels.

The main argument still is that this is part of the national interest and the second point is that this is the only Brexit deal, there is not going to be a better one.

The voting day has been confirmed and it is the 11th of December, that is on Tuesday. So, there is excatly 14 days before the vote in Westminister in London. The Bank of England and Goverment  are going to publish their analysis of the economic impact of the Brexit-deal. According to Reuters, this information should be ready tomorrow,  on Wednesday this week.

The financial markets were mixed today. For example the German Dax-index ended down 0,40 percent to 11309,11 points and in Paris the stocks were down 0,24 percent-  the CAC 40 -index ended at 4983,15 points. In London the FTSE 100 -index ended down 0,27 percent and was 7016,85 points.

In Wall Street the stocks were also mixed – Dow Jones -index was up 0,18 percent at 24685,55 points and  S&P 500 -index was up 0,09 percent to 2675,87 points. Nasdaq-index had declined by 0,22 percent and was 7066,08 points.

This week will be important G20 meeting in Argentina and  according to Financial Times the US- China tradetalks have not performed  as good as expected so far. The question of the US- UK tradetalks in post Brexit-time is also one of the topics.

One of the big news today was the General Motors layoffs in the US. The car company announced its plans to cut production at several sites and to lay off more than 14.000 workers. The stock of GM (GM) was down 3,55 percent to 36,32 dollars. President Donald Trump tweeted that he will consider cutting all GM subsidies because of the plans. “including the electric cars”, he tweeted according to CNBC.

The euro was down by 0,30 percent to 1,129 US-dollars and the sterling was down by 0,76 percent to 1,2730 US-dollars.

 

 

 

 

 

Business Finance

China and the UK in trade talks – China to resume purchases of US crude oil?

China and Britain have agreed to actively explore the possibility of discussing a top notch free trade agreement. According to Reuters, the China Commerce Ministry said on Saturday that the countries discussed last week how to boost the two-way investments and expand trade in services. The British Trade Minister Liam Fox and  the Chinese Minister  of Commerce Zhong Sham met last week in Beijing.

The UK has said earlier that it  aims to grow the export to 35 % of the gross domestic product after leaving the EU.  The official talks of the free trade cannot begin until Britain has left the Union.  The departing time is Friday 29th March 2019, at 11 pm. There is also the new transition period from the March 2019 to December 2020 to get everything in place and allow businesses to prepare for the new post-Brexit time.

It seems that during last week there has been some progress in the trade disputes. For example according to Reuters the Chinese Unipec, which is a trading company of the China Petroleum & Chemical Corporation (386: HK)  (Sinopec), would resume the purchases of US Crude Oil in October. This would be the start of the buying after two-month delivery stops due to the trade tarffis talks.

Sinopec is one of the largest buyer of US Crude Oil. The company has also launched its Green Action Plan, which means that the company is aiming to become a clean, efficient and low-carbon company by 2023. This means for example that the share of its clean energy output would grow in the energy mix and for example LNG transfer capacity would reach more that 26 million tonnes a year and geothermal heating would reach 120-150 million square meters by 2023. This would mean geothermal heating to about 2,1 million urban residents.

The company said that the half-year earnings were at the highest level on record due to the profits in refining and rebound in crude prices. According to Bloomberg, net income was 42,4 billion yuan in the first 6 months. Operating profit from the refining business was up 32,5 % to 38,9 billion yuan and the chemical segment showed a 29,7 percent gain.

Revenue rose 11,5 percent to 1,3 trillion yuan and capital expenditures were 23,7 billion yuan in the first half compared with the full-year estimate of 117 billion yuan. Sinopec made the filing to Shanghai Stock Exchange  today on Sunday.

 

 

 

 

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