Global Markets Mixed, Energy Prices Threaten Global Expansion, FOMC Meeting Starts TodayGlobal markets are mixed on rising oil prices and FOMC uncertainty.
The U.S. Indices Are Down In Early Tuesday Trading
The U.S. indices are down in early Tuesday trading after the single largest spike in oil prices in over a decade. The rise in prices is due to an attack on Saudi’s oil infrastructure that experts believe will take weeks if not longer to repair. WTI and Brent both surged more than 14% in the Monday session and threaten to send fuel prices up around the world. A rise in fuel prices would be another drag on global GDP and could send the economy into a recession. President Trump and experts say the attack originated in Iran although Iran denies the claims. At this point, 50% of Saudi Production is offline and that will affect about 5.0% of the global output.
In trade news, deputy-level talks are set to begin this week in Washington. The talks, scheduled for Thursday, are intended to pave the way to higher-level talks next month. In stock news, shares of Home Depot are moving lower after a downgrade from Guggenheim. The downgrade, to neutral, is a surprise following the firm’s initiation at Buy. About two-thirds of the analysts following HD, 21 of 34, rate the stock a buy. The Dow Jones is in the lead in early trading with a loss of -0.25%. The S&P 500 and NASDAQ Composite are both down about -0.15%.
EU Markets Are Mixed At Midday
The EU markets are mixed at midday as geopolitical tensions dominate the headlines. In local news, the BOE is meeting this week and also expected to deliver some form of support for the market. The BOE is faced with the tough challenge of maintaining UK economic health during peak Brexit uncertainty. The DAX is down about -0.34% while the CAC has shed -0.05%. The UK FTSE 100 is the only major index in the green posting an advance of 0.15%.
In stock news, shares of Food & Beverage companies are on the rise, rebounding more than 0.90% after yesterday’s decline. Novo Nordisk is also moving higher. The company has announced a deal with Medtronic to team up on Diabetic care. Shares of that stock are up 3.0%.
Asia Mixed, Australia Up On Oil
Asian markets are mixed despite the renewal of U.S./Chinese trade talks. the Shanghai and Hangseng are both down more than -1.25% while the Nikkei and Kospi are hugging the flat-line. In Australian, the ASX advanced about 0.35% on strength in the energy industry. Rising oil prices may weigh on the broad economy but will also boost earnings in energy companies. In other news, President Donald Trump and President Shinzo Abe have announced a preliminary trade deal that will not require the approval of the U.S. Congress.