Markets in limbo | Calamatta Cuschieri

Global markets turned out mixed results in Thursday’s trading with oil continuing to cast a shadow over the markets despite closing up from multi-month lows. Brent crude futures were up, however remain under pressure from oversupply despite OPEC’s efforts to rebalance the market. Tracking this, shares in oil companies weighed down on the FTSE with the Royal Dutch Shell and BP amongst the biggest movers. On the other hand, the German DAX emerged victorious with strong performance from the automotive sector.

Oil, however, did not leave a big enough impression on Wall Street as it closed in the green with the technology sector contributing greatly as biotech stocks continued their rally. Oil prices decoupled from the US equity markets as investors realised that lower oil prices are not a sign of global slowdown but rather excessive supply from the USA, Russia and Iran.

Going for gold

Gold looked ready to tally back-to-back session gains on Thursday, clawing up from the five-week lows struck earlier this week. It was due a come-back as slight upticks in risk aversion in the equity markets often support the rare metal.

The political situation in the US, the UK, and North Korea-related developments were among the other factors creating a safe-haven demand for gold. Among other precious metals, silver saw modest rises, platinum climbed more substantially, while palladium slipped.

Stocks to watch

Oracle remains in the spotlight as the biggest market mover in the US as trading closed with the technology firm’s shares well into the green. After the close, Oracle reported strong May quarter revenue, soundly above consensus analyst estimates and notably, the company also reported rises in its total cloud and on-premises software revenue, beating growth guidance. Top-line growth rates benefited a bit from Oracle's $9.3 billion purchase of mid-market cloud app provider NetSuite, which closed last November.

Staples finds headlines after stocks closed up on Thursday’s trading session amidst speculation that an acquisition on the firm is right around the corner. The office supplies retailer is said to be in advanced talks with Private equity firm Sycamore Partners in a deal that could be worth more than $6 billion.

Big banks clear Stress Test

The 34 largest US banks have all cleared the first stage of an annual stress test, showing they would be able to maintain enough capital in an extreme recession to meet regulatory requirements, the Federal Reserve said on Thursday. "This year's results show that, even during a severe recession, our large banks would remain well capitalized," Fed Governor Jerome Powell said. Stress tests were introduced by the Federal Reserve in the wake of the financial crisis to ensure the health of the banking industry, whose ability to lend is considered crucial to the health of the economy.

Disclaimer:

This article was issued by Peter Petrov, 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 Investment Services Ltd has not verified and consequently neither warrants the accuracy nor the veracity of any information, views or opinions appearing on this website.