Market Commentary | Oil and financials lift market

Global markets were mainly higher on Wednesday. Asian markets finished mixed after a host of data of out China showed the world’s second largest economy enjoyed better than expected growth, but slower industrial production. Shares in Europe ended a choppy session in positive territory, as a fresh rise in oil prices helped fuel a rally for energy shares and lifted the market’s benchmark. US stocks struggled to find direction as traders assessed corporate earnings, with a disappointing forecast from Intel outweighing better-than-estimated results at Morgan Stanley.

Energy shares were in the spotlight on Wednesday, as crude oil sailed 3% higher to trade above $51 a barrel. This rise came a day after the American Petroleum Institute reported a fall 752,000 barrel fall in US crude supplies, marking the second consecutive and unexpected weekly decline. Also helping prices cruise higher was news from Saudi Arabia’s oil minister Khalid Al-Falih. At a London conference on Wednesday, he spread the news that many countries outside the Organisation of the Petroleum Exporting Countries (OPEC) are willing to join an output deal to help stabilize the oil market. Shares of BP, Royal Dutch Shell and Total SA were all in the green during Wednesday’s session.

In company news, French retailer Carrefour reported an acceleration in sales growth and saw its shares rise over 4.5%.

Wednesday was a good day for financials. In the US, shares of Morgan Stanley were trading in positive territory and was one of the biggest gainers among S&P 500 stocks, after it reported a profit that beat analyst forecasts. The stock was the latest in a string of financials – including Goldman Sachs Group and J.P Morgan Chase - that topped consensus expectations and boosted equities. The S&P financial sector rose 0.5% and was one of the biggest gainers of the day.

Meanwhile, the earnings seasons carried on Wednesday, picking up pace amid a mood of political and economic uncertainty, with the next Fed meeting and the presidential election just three weeks away. Still, eight of the thirteen S&P components posted results that beat Wall Street estimates.

It wasn’t all good news on the earnings and outlook front however. Trading well into the red were shares of Intel Corp and Reynolds American. Intel shares were among the worst performers on Wednesday, after the company reported a disappointing revenue outlook. Shares sank 6%, making it its biggest one-day from since January. Meanwhile Reynolds American were trading lower after earnings and revenue fell short.

This article was issued by Rebecca Naudi, Trader at Calamatta Cuschieri. For more information visit, www.cc.com.mt. The information, view and opinions provided in this article is being provided solely for educational and informational purposes and should not be construed as investment advice, advice concerning particular investments or investment decisions, or tax or legal advice. Calamatta Cuschieri Investments Services Ltd has not verified and consequently neither warrants the accuracy nor the veracity of any information, views or opinions appearing on this website.