Editor
Here is what’s moving the market: OPEC Considers Cuts, UAE Plans Rise; Mixed Markets on PCE Data
Saudi Arabia and its lies to OPEC might initiate another 1 million barrels per day of production cuts. Most of the oil cartel members support further oil production cuts, while Nigeria and Angola resist quota downgrades. In the meantime, crude futures are on the rise due to reported considerations by OPEC and allies for new oil production cuts of up to 1 million bbl/day. On top of that, delegates suggest the most likely scenario is the rollover of existing output curbs, but discussions are ongoing.
However, there is another major player in the oilfield, the United Arab Emirates. Reports say that the United Arab Emirates will go against the decision of Saudi Arabia and instead support the rise of daily oil production by a capacity of 5 million barrels by 2027.
For the stock market, the West Texas Intermediate declined by 2.93% to its current market price level of $75.7 per barrel. Bernt oil was down by 2.53% to $80.7 per barrel.
In other economic news, the Dow Jones Industrial Average rose 295 points (0.84%), the S&P 500 was down 5 points (-0.12%), and the NASDAQ Composite dropped 98 points (0.68%) by 12:14 ET.
The mixed economic data in today’s session was due to the rise of the October PCE inflation data. Ed’s preferred measure shows a 3.0% annual rise, slowing from 3.4% in September, supporting hopes of effective interest rate hikes. The reports signal that the energy price drop contributes to the deceleration. The monthly measure remains at 0.0%, down from 0.4% in the prior month, aligning with economists expectations. On the other hand, the stock market also registered higher gains, which will contribute positively to the Fed’s next policy meeting decisions. The Dow is on track for a 7.2% increase, the S&P 500 is up 8.5%, and the Nasdaq is advancing nearly 11%. With this data, investors’ hopes for an interest rate hike pause just rose slightly higher.
The monthly continuous positive momentum gains reflect increasing confidence in the central bank’s anti-inflation measures gaining effectiveness. Optimism is reinforced by October’s Personal Consumption Expenditures (PCE) inflation data, the Fed’s favored indicator, revealing a 3.0% annual increase, a deceleration from September’s 3.4%. Aligned with economists’ predictions, these figures support the notion that the Fed’s inflation-control strategies are working, prompting investors to adapt their expectations accordingly. The December meeting is expected to signal a pause in rate hikes, with attention shifting to potential rate cuts in the coming year. As excited and forecasted by JP Morgan Chase, there will be additional interest rate hikes in the next year. As inflation is still in focus, the U.S. Federal Reserve will keep raising its key interest rates until they’re down to the objective of 2%.
Moving to the giant automaker Tesla and its anticipated event, Elon Musk says, “It will be the biggest product launch of anything, by far, on Earth, this year. Elon Musk anticipates the Cybertruck launch as the most significant global product debut this year. As Tesla enters the pickup truck market with an electric twist, investors eagerly await its unveiling. Despite previous delays in production since its 2019 announcement, today’s event is expected to create a buzz, with only a limited number of EV pickups initially released. The unveiling coincides with the impact of Biden’s EV rule on subsidy qualifications.
