Spreadex Market Update
Dismal end to the week as investors eye Sunday’s oil summit in Doha
Brent Crude slipped over 2.5% as the afternoon went on, investors nervous about the chances of progress when OPEC and some of the world’s major oil suppliers meet at the weekend. Beyond the general difficulty of trying to secure an oil output freeze deal outside of the Saudi Arabian-led cabal the upcoming meeting in Doha is complicated by the fact that Iran, arguably the key country in terms of anything positive arising from Sunday’s summit, hasn’t confirmed whether it is coming or not. It is the latest instance of Iran’s intransigence in regards to a freeze, the country refusing to discuss its production levels until they return to their pre-sanctions position.
Unsurprisingly, of the major indices the FTSE felt the biggest weight from the pre-Doha jitters plaguing Brent Crude, the index dropping by nearly 30 points as Friday continued. The start of next week will likely be defined by what happens on Sunday, with the FTSE in line for either a big boost (with 6400 in its sights) or a precipitous plunge (back to the dreaded 6200 level) dependant on what, if anything, is agreed at the weekend.
Whilst the situation in Europe looked a bit ropey the Dow Jones managed to just about hold its head above 17900 after the bell, only seeing the slightest of 0.1% slips as the day continued. It’s impressive the index hasn’t fallen further given the softness of the afternoon’s data; industrial production plunged to -0.6% (compared to an expected -0.1%), whilst the capacity utilization rate hit 74.8%, a low not seen since September 2010. Perhaps most damningly the preliminary UoM consumer sentiment figure fell to 89.7, a 6 month nadir. The Empire State manufacturing index was the one anomaly this afternoon, rising to a 15 month high of 9.6.
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