Market Update: What Happening In The US? Federal Reserve, Mid-term Elections

The previous week wrapped up with the primary events like mid-term elections and the Federal Reserve’s meeting ending with the results which were broadly expected by the market players. The Fed kept the rates unchanged which was very much in line with the expectations. However, the market players were also expecting the Federal Reserve might become dovish because of the concerns regarding the global economic downturn and because of the recent sell-off in the equities. It seems like Federal Reserve has not considered this and they have remained hawkish thus, raising the hopes that the US economy needs to prepare itself for another hike in the month of December 2018. It reflects that the significant sell-off is required in order to convince the Federal Reserve to slowly raise the interest rates. The investors are presently facing other issues as well. The US companies are concerned about the elevated levels of the wages which could severely impact the profit margins. The investors are worried that the expected decline in the profit growth moving forward might be worse than anticipated. As per the market players, the restaurants, hotels, energy equipment and services, retailers as well as IT services are the industries which could face the impact of the increased wages.

Oil Prices are on a Roller-Coaster Ride

A lot has happened, and a lot is happening in the oil markets. Earlier, the oil prices witnessed a rise primarily because of the sanctions imposed by the United States on Iran. Later on, the US granted exemptions to some of the countries and allowed selected countries to buy the oil from Iran. This, along with the concerns regarding the weaker demand for the oil, weighed heavily on oil prices and thus, the oil prices witnessed a substantial decline. However, on November 12, 2018, the oil witnessed a rise on the back of the announcement which was made by Saudi Arabia stating that it would be reducing its supply in December. This step by Saudi Arabia has been taken so that the price fall in the crude can be capped. In the month of December, Saudi Arabia has plans to cut the oil supply by 0.5 million barrels per day or bpd. This decision has been taken on the back of the seasonal lower demand. As a result of the announcement, the global oil supply would be reduced.

Australian Market Ended Higher

The Australian markets closed the session on the positive note as S&P/ASX200 settled at 5941.3 which implies an increase of 19.5 points or 0.3%. Elders Limited (ASX:ELD) and Healthscope Limited (ASX: HSO) ended the session by advancing 19.703% and 14.423%, respectively. On the other hand, Afterpay Touch Group Limited (ASX: APT) and Lendlease Group (ASX:LLC) ended the session by witnessing a decline of 7.339% and 6.316%, respectively. The investors are still concerned about the performance of the big banks which are operating in Australia primarily because of the increased tensions about the weakening in the property market. Another concern like slower credit growth because of Royal Commission is also hovering in the minds of the market trackers which could also adversely affect the banks’ performance.

The Australian and New Zealand Banking Group Limited (ASX: ANZ) ended today’s session on a weaker note. Read the full post here.

QBE Insurance Group (ASX: QBE) participated in the UBS Australian Conference in which the company also highlighted the simplification process. Read the full post here. As per the update provided by Link Administration Holdings Limited (ASX:LNK), the trade sale offer to acquire PEXA has been approved by more than 82% of PEXA's shareholders. Read the full post here.

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