2023-09-18 21:57:58
Slight rises for US stocks and eyes on the Fed meeting
US stocks witnessed slight movements, ending in the green zone, on the first day of the week that will witness the Federal Reserve’s meetings and its interest rate decision, which is expected to be announced at two o’clock in the afternoon on Wednesday.
By the end of trading on Monday, the three major stock indices were close to the point at which they began, and the best performing of them was the S&P 500 index, which rose by 0.07%, led by “Apple” stock, which alone represents more than 7% of the total value of the index. Which rose by 1.69%, after China announced strong demand for its latest product, “iPhone 15.”
The Federal Reserve’s two-day monetary policy meeting begins on Tuesday. Market futures indicate a 99% expectation that the bank will hold its key interest rate at its current level, according to CME Group’s FedWatch tool.
But that agreement is not locked in around the Fed’s November decision, with the market showing a roughly 31% probability of a quarter-percent rate hike. Economists at Goldman Sachs said over the weekend that a rate hike in November would have very bad effects on the economy.
In Europe, European stocks ended trading on Monday lower, with shares of the French bank Société Générale declining, after a long-awaited strategic plan from its new CEO caused disappointment for investors, amid a state of caution ahead of a series of central bank meetings this week.
The European STOXX 600 index fell 1.1%, after rising about 1.6% last week.
Societe Generale shares fell 12.1% to their lowest levels in more than two months, after the third largest bank in France said that it does not expect significant growth in annual sales over the coming years. The Eurozone banking index fell 1.9%.
The healthcare sector also declined, led by Novo Nordisk, whose shares lost 2.4%.
In a week full of central bank meetings, the Bank of England (the Central Bank) is expected to raise interest rates for the fifteenth time on Thursday, despite expectations that the Federal Reserve (the US central bank) will keep interest rates unchanged on Wednesday.
On the energy front, oil prices closed higher today, Monday, supported by expectations of a shortage in supply due to Saudi Arabia and Russia extending their production cuts, and limited supplies of shale oil, which overshadowed concerns about demand.
Brent crude futures rose 50 cents at settlement to $94.43 a barrel after jumping to $94.45. US West Texas Intermediate crude futures rose 71 cents to $91.48.
This month, Saudi Arabia and Russia extended the production cut by 1.3 million barrels per day until the end of the year.
The US Energy Information Administration expected, in a monthly report, that US oil production from the largest shale oil producing regions would decline for the third month in a row in October to its lowest level since May 2023.
Saudi Energy Minister Prince Abdulaziz bin Salman on Monday defended OPEC+ cuts to oil market supplies, saying that international energy markets need regulation to reduce volatility.
Prince Abdulaziz warned of continued uncertainty about Chinese demand, growth in Europe, and central bank actions to address inflation.
Brent and US West Texas Intermediate crude oil continued to rise for the third week in a row, touching its highest levels since November, on the way to achieving their largest quarterly rise since the Russian invasion of Ukraine in the first quarter of 2022.
Dennis Kessler, senior vice president of trading at BOK Financial, said that the oil market is witnessing some profit-taking.
On Monday, Citibank joined the list of banks that expect Brent crude prices to exceed $100 per barrel this year. Chevron CEO Mike Wirth said in an interview with Bloomberg News that he believes oil will exceed $100 per barrel as well.
Analysts at ANZ said that Saudi Arabia and Russia reducing their production may lead to a deficit of two million barrels per day in the fourth quarter, and that withdrawing from stocks may leave the market vulnerable to further price increases in 2024.
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