Thursday, 8 June 2017

Oil plunges but stocks “able to hold off on a big selloff”

Oil prices plunged on Wednesday.

West Texas Intermediate crude fell 5.1 percent while Brent fell 4.1 percent after a report showed that US crude stockpiles unexpectedly rose for the first time in nine weeks.

Stock markets largely shrugged off the turmoil in oil.

The S&P 500 rose 0.2 percent, the STOXX Europe 600 fell 0.1 percent and the Nikkei 225 was little-changed on Wednesday.

Mark Kepner, managing director of sales and trading at Themis Trading, was impressed by the stock market's resilience, noting that it has “been able to hold off on a big selloff” despite the oil plunge and political concerns.

Still, Jack Bouroudjian, chief economist and co-founder of UCX, told CNBC that the US stock market is “one bad headline” away from a 5 percent to 7 percent drop.

In contrast, Avi Gilburt, founder of ElliottWaveTrader, thinks that there will not be any big correction “until we hit a top probably in 2018”.

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