Market Update: Mid-term Elections, Oil Prices, ASX and Much More

  • Nov 07, 2018 AEDT
  • Team Kalkine
Market Update: Mid-term Elections, Oil Prices, ASX and Much More

What Mid-term Elections Results Would Mean for China? 

The market participants had been analyzing and eyeing the mid-term elections of the United States (US) and they are also expecting that the markets would also react to any news from that front. According to them, the US mid-term elections are expected to change how Mr. Trump can accomplish the domestic goals. However, the final results would not be meaning much with respect to the trade policies of the US. The market trackers are of the view that the “as expected” outcome would be posing substantial challenges for the Trump on areas like military spending as well as foreign business dealings. However, Mr. Trump would be having the executive power when it comes to the trade policies. Also, it would be beneficial for the US economy that Mr. Trump handles all types of trade decisions. One cannot forget his contribution to the US economy as the robust momentum is primarily the result of his trade decisions. When it comes to the trade relations with the US and China, the keen market observers are of the view that the overall stance is going to be similar. The Republicans as well as Democrats are expected to remain tough with regards to the Chinese trade as well as intellectual property practices. Notably, on November 6, 2018, Dow Jones Industrial Average ended the session on a positive note as the index witnessed an increase of 173.31 or 0.68% and settled at 25,635.01.

Oil Prices Continue to Fall  

The oil prices continue to fall on the back of the strong supply to the oil markets because of the elevated production levels as well as waivers which have been granted to some countries. These waivers have been granted to the biggest customers of Iran and thus, allowing them to continue to buy crude from Iran. The strong supply to the oil markets have turned around the sentiments of the market participants as previously the sentiments were bullish as the market players were expecting that the Iran sanctions might lead to supply shortages. However, these tensions were relaxed after Saudi Arabia stated that it would be raising the production levels to meet the supply requirements. The market analysts are of the view that oil prices have been declining primarily because of the expected weakening of the demand with respect to the oil needs, elevated supply as well as the grant of waivers. Strong production levels have been encountered from the top three producers namely Russia, the United States as well as Saudi Arabia. Iraq is also planning to raise the production capacity to 5 million barrels per day or bpd next year from 4.6 million bpd. All these factors jointly have weighed significantly on the minds of the market players which have been pulling the oil prices lower.

Australian index ended strong  

The Australian markets ended on the positive note as S&P/ASX200 ended the session at 5896.9 which implies that the index saw a rise of 21.7 points or 0.4%. Amongst the gainers were Infigen Energy (ASX: IFN) and WorleyParsons Limited (ASX: WOR) as they have rose 11.765% and 10.448%, respectively. However, Webjet Limited (ASX: WEB) and Sigma Healthcare Limited (ASX: SIG) ended the session by witnessing a fall of 7.591% and 3.67%, respectively. The Australian economy continues to struggle with the falling housing prices because of a decline in the investor as well as owner-occupied demand. Moreover, the market trackers have also presented their bearish views over the Australian housing markets because of the tighter lending conditions leading to lesser liquidity. Additionally, Royal Commission’s report is also another factor hovering over the market sentiments. The market analyzers are of the view that housing prices in Melbourne as well as in Sydney would also be witnessing robust decline.


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