Market Update: Dark Clouds Over The US Markets. Can Investors Digest the Worries?

The US markets are presently witnessing a strong downtrend primarily because of the increased worries about the geopolitical problems which might lead to the slowdown of the global economic growth. The session on December 7, 2018 also further increased the worries of the global market participants and, the Dow Jones ended in the red. On December 7, 2018, Dow Jones Industrial Average ended at 24,388.95 which implies an intraday fall of 558.72 points or 2.24%. The market players were already worried about the increasing worries between the US and China on the trade front, and with the arrest of Huawei’s CFO, the worries have only increased. It could be assumed that the small hope of the settlement of the trade worries between the United States and China, which was lightened in the G-20 meeting, has now been erased. Therefore, the expectations are that the market players would witness the unfavourable momentum in the financial markets which could further impact their risk appetite.

The fears of the trade wars have been impacting the investors’ minds from the past several months, and it seems like the situation would now even get worse. The escalation in the trade battle would further derail the prospects of the global growth.

Some Optimism in the Oil Markets: Will it Last?

While the financial markets are still witnessing the impacts of the macroeconomic worries, it seems like the oil markets are somewhat on the path to recovery. After the meeting which was closely tracked by the participants in the oil markets, the reduction in regard to the production levels has been announced. It seems like now the oil prices might witness favorable momentum which could help the oil market players to regain their confidence. However, one question would still be there. Whether the optimism created in the oil markets would continue for a long period of time? It can also be assumed that the oil markets would also be impacted by the global macroeconomic worries as well as unfavourable momentum in the financial markets. Earlier, the oil prices were witnessing strong downtrend because of the concerns about the increased supplies as well as prospects for the lower demand. The oil demand might get impacted because of the tensions related to the slowdown of global growth.

Unfavourable Impacts Witnessed on Australian Markets as Well

With the unfavourable impacts being felt on the equity markets, the Australian markets cannot be treated as an exception. As expected by several market players, the Australian markets ended today’s session by witnessing strong downtrend. S&P/ASX200 closed at 5552.5 which implies the fall of 129 points or 2.3%. It seems like the impact of the unfavourable global factors have also weighed over the Australian markets. Talking about the stock which have gained today, Regis Resources Limited (ASX:RRL) and Sandfire Resources NL (ASX:SFR) ended the session increasing 5.213% and 3.006%, respectively.

On the other hand, Automotive Holdings Group Limited (ASX:AHG) and Seven West Media Limited (ASX:SWM) closed the session by witnessing the decline of 10.909% and 9.924%, respectively. Additionally, the management of IOOF Holdings Limited (ASX:IFL) announced management changes. Read the full news here. DomaCom Limited (ASX:DCL) had also made an announcement which states that the company had got the funding. Read the full news here.

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