Thursday, 15 November 2018

Stocks fall but oil rises as “macro demand concerns likely overdone”

Markets fell on Wednesday.

The S&P 500 fell 0.8 percent and the STOXX Europe 600 plunged 2.2 percent. Earlier in Asia, the Nikkei 225 rose 0.2 percent but the Shanghai Composite fell 0.9 percent.

Oil prices stabilised though, with West Texas Intermediate crude rising 1 percent to end a 12-session losing streak.

Jeffrey Currie and the commodities team at Goldman Sachs wrote in a note that “the macro demand concerns from October were likely overdone”.

Nevertheless, Jameel Ahmad, global head of currency strategy & market research at FXTM, said that “traders are waking up to the significant threat that slowing global growth in 2019 will weaken demand for commodities like oil”.

While oil's gain provided some relief for stocks on Wednesday, the stock market is still experiencing “a continuation of the selling pressure that began in early October”, according to Robert Pavlik, chief investment strategist at SlateStone Wealth.

“We're still working through this corrective phase a little bit and I think that could take some time,” said Jeffrey Mills, co-chief investment strategist at PNC Financial Services Group.

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