Daily Market Color

Oil Rallies on Production Freeze Outlook, Boosts Risk Assets

Risk assets across the globe are trading at all-time highs as oil continues to surge with talks of a potential production freeze.  Oil prices have climbed over 2.5 percent today after Russian Energy Minister Alexander Novak confirmed Saudi Arabia’s price-stabilization comments from last week, stating that Russia has been consulting with Saudi Arabia and other OPEC members in efforts to better balance the supply/demand dynamic.  Here in the US, the NAHB Housing Market Index reflected strength in real estate, rising 2 points to 60 (as expected), with the monthly Housing Starts data scheduled to be released tomorrow.  Further contributing to the market rise, the probability of a Fed rate hike in 2016 decreased from 49% to 42% in wake of last week’s underwhelming Retail Sales figures.  The drop strengthens economists’ conviction that the Fed will be slow in increasing US rates, as central banks worldwide will continue to maintain their loose monetary policies to try to stimulate their respective economies.

Abroad, Chinese equities gained on the back of news indicating a strong possibility of further acquisitions/consolidation in the Chinese real estate sector.  The China blue-chip index, CSI300, rose 3.3% to a new 7-month high.  European stocks held steady at near two-month highs with the healthcare sector showing the most strength.   In addition, the MSCI Emerging Markets Index climbed 0.4% to its highest level in more than a year.  Japan’s Nikkei 225 did not follow these broad bullish equity moves, as it finished down for the day after data revealed the country had failed to grow during the 2nd quarter, citing weaknesses in exports and business investment.
All three major US equity indexes reached record levels yet again today, with the Nasdaq leading the way, up over .65% to 5,270.  After posting the highest weekly rise in prices since April, Brent and WTI crude continued rising to over 45.50 and 48 per barrel, respectively.  Treasury yields and swaps rates are up slightly on the day, up 1 – 3 basis points across the curve. 

Ready to start a conversation?

We offer free consultations and platform demos.

Let's Talk