Good Morning,
Global stocks closed higher (Dow Jones +165 points), following better than expected US earnings and crude oil above $42/barrel on “speculation” that Saudi Arabia and Russia reached a consensus on an oil freeze during talks on Tuesday.
Energy producers led the rally….
So is Goldman Sachs wrong with their call that oil will be closer to $20/barrel by year’s end?
Most probably….
In Oz, Bellamy’s, Blackmores, A2 Milk & Bega Cheese are in “crisis talks” with Chinese authorities on a suggested 11.9% tax on products bought on ecommerce websites…
The “market darlings” of the ASX, are under hot water and this uncertainly is likely to cause some further selling pressure, until it is resolved….
So why is oil rallying?
Crude extended gains after Russia’s Kremlin said it sees ‘hope’ for a deal in Doha, regardless of whether Iran joins. Saudi Arabia, the biggest OPEC producer, said previously it would agree to a cap only if it’s joined by other suppliers including Iran, while Kuwait said a deal can be done without Tehran’s support. West Texas Intermediate added 4.5 percent to $42.17, the highest since Nov. 25.
Copper recovered for a second day from its biggest weekly loss in three months, rising 2.2 percent to $4,766.5 a metric ton. Aluminum rose 1.6 percent to $1,533 a ton.
Silver in the spot market climbed 1.5 percent to the highest price since June.
The SPI is up 22 points this morning.
Niv
Niv Dagan is an Executive Director of Melbourne based boutique funds management and corporate advisory firm, Peak Asset Management (www.peakassetmanagement.com.au). He is also a regular financial commentator on Sky Business.
