Saturday, 26 May 2018

Oil plunges but stocks look a good bet

Markets were mixed on Friday.

The S&P 500 fell 0.2 percent but the STOXX Europe 600 rose 0.1 percent and the Nikkei 225 edged up 0.1 percent.

Crude-oil futures plunged 4 percent following reports that the Organization of the Petroleum Exporting Countries and other major producers may lift production by as many as 1 million barrels a day.

John Augustine, chief investment officer at Huntington Private Bank, said that higher oil production “may result in a weak patch for the energy sector, but for the broader market that could be offset by a rise in sentiment if it results in gas prices falling going into the summer driving season”.

Indeed, Credit Suisse analyst Andrew Garthwaite thinks stocks are a good bet.

“We conclude that a US recession is unlikely until Q3 2020,” Garthwaite wrote in a note to clients Friday. “Remain overweight equities.”

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