The results of the mid-term elections seem to have cheered the investors as the strong positive momentum was witnessed in the Dow Jones Industrial Average. The index ended the session at 26,180.30 which implies a rise of 545.29 points or 2.13%. The results of the elections came out as was expected by the market trackers. A rise in the broader markets got fueled as Mr. Trump had indicated that he would be working with Democrats in regard to the policy initiatives which would support the economy is witnessing strong growth momentum. The strong momentum was also witnessed in the technology stocks as Amazon (NASDAQ: AMZN) ended the session by advancing 6.86% while Facebook (NASDAQ: FB) rose 1.06%. Earlier, the tech heavy weights have witnessed a substantial decline and Amazon’s disappointing forecasts have actually weighed on the investors’ sentiments. The stock price of Caterpillar Inc. (NYSE: CAT) also witnessed the rise of 4.44%. The market participants are of the view that the strong momentum in Caterpillar was well-supported by the continued robust economic growth.
Increased Supply Weighs on Oil Prices
The oil prices are continued to fall on the back of concerns of the high supply. The market players are of the view that demand for oil is expected to decline and a rise in supply create the situation of “oversupply” and hence, the prices have been declining continuously. The primary reason for the rising global output is because of the increased US crude production. The commencement of the US sanctions on Iran failed to increase the oil prices primarily because the United States has granted waivers to eight countries. These countries are allowed to buy crude from Iran. The production is not only at the elevated levels in the United States but also in other countries which include Saudi Arabia, Iraq, Russia as well as Brazil. The Energy Information Administration or EIA is of the view that by mid-2019, the US crude production would further increase. Not so long ago, when there were concerns that the Iran sanctions might lead to lower supply, Saudi Arabia stated that it would be raising the production levels, so the supply shortages can be met.
Australian Markets Continues to Show Strength
The Australian market ended on the positive note as S&P/ASX200 ended the session at 5928.2 which implies that it rose 31.3 points or 0.5%. This strong momentum was witnessed primarily because of the robust momentum witnessed on the US markets as the mid-term results were as expected by the market participants. Eclipx Group Limited (ASX: ECX) ended the day by rising 16.087% and Corporate Travel Management Limited (ASX: CTD) closed by increasing 14.75%. However, James Hardie Industries PLC (ASX: JHX) and Domino’s Pizza Enterprises Limited (ASX: DMP) ended the session by declining 14.646% and 10.704%, respectively.
McMillan Shakespeare Limited (ASX: MMS) has made an offer of $912 million in order to take over the shares in Eclipx by early 2019. Moreover, Goodman Group (ASX: GMG) reported its quarterly results for three months ended September 30, 2018.
The market participants would closely be monitoring the Federal Reserve’s meeting. They can be relaxed as the Federal Reserve would not be raising the rates in this meeting. However, they need to pay attention on what they say about the December rate hike expectations as well as what it plans to do in the next year.
The Income available from dividends remains attractive for many investors.
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