Falling oil drags energy stocks and FTSE lower
Fiona Cincotta November 23, 2018 4:07 PM
Whilst this Black Friday sales are expected to break records, bargain hunters on the financial markets were few and far between.
Black Friday’s falling prices were mirrored in the falling stock markets, however that’s where the similarities ended. Whilst this Black Friday sales are expected to break records, bargain hunters on the financial markets were few and far between. Heading into the close the FTSE was firmly in the red, dragged lower by energy stocks, as oil struck a one year low.
Saudi Arabia has suggested a possible production cut of 1.4 million barrels per day. Traders have as good as shrugged off these suggestions. This firstly highlights the level of concern over the outlook for oil. But secondly it highlights the need for further confirmation from Saudi Arabia and OPEC regarding their intentions. The silence from Saudi Arabia since the initial comments if anything has unnerved the markets further. The timing appears all too convenient; President Trump, supporter of low oil prices stands by the Saudi’s in the wake of the Khashoggi assassination. One can only assume that there has been some quiet deal on the side….?
Thin post-Thanksgiving trading is the straw that broke oil’s support. WTI has headed through $50 and Brent is sub $60.
Wall Street opened on the back foot following the public holiday. Energy stocks dragged the broader market lower as did nerves over the upcoming G20 summit next week. Little progress appears to have been made between China and the US ahead of the meeting. This means realistically that we can’t expect much progress between the two leaders when they meet in Buenos Aires.
Euro lower on slowing growth concerns
In the currency markets the euro was trading lower as concerns over eurozone growth refused to disappear. PMI data for the region showed that eurozone business activity growth slumped to the lowest rate in four years. Manufacturing was hardest hit owing to weakened global demand and rising political uncertainty amid growing trade war tensions. Whilst the service sector fared marginally better, growth was still at the lowest pace in two years. Add into the equation slowing employment growth and suddenly weak Q3 GDP data no longer looks like an anomaly.
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