Market Update: US Markets Ended Lower As Financial Stocks Fell

  • Oct 23, 2018 AEDT
  • Team Kalkine
Market Update: US Markets Ended Lower As Financial Stocks Fell

It seems like markets have decided to dent the investors’ sentiments. Dow Jones Industrial Average ended on a weaker note as the index closed at 25,317.41 which reflects that it had shrugged off 126.93 points or 0.50% in a single day. The primary reason that the US markets were unable to impress the market participants because the financial stocks were seen struggling on October 22, 2018.

The week would see the flood of the corporate earnings amid the heightened geopolitical tensions which have weighed on the investors’ sentiments. Bank of America Corporation (NYSE: BAC), Citigroup (NYSE: C), JP Morgan Chase (NYSE: JPM) and Goldman Sachs (NYSE: GS) ended the session lower by falling 3.32%, 3.24%, 1.48%, and 2.44%, respectively. The primary reason for the fall in the banking stocks was that the market players were worried about increased mortgage rates and this could restrict the growth of the loans.

What Has Triggered a Fall in Oil Prices: Even though the tensions related to the US sanctions on the exports of Iran which would commence as soon as earlier next month are still there, the oil prices fell today. The primary reason which pulled the oil prices down was the expectations that Saudi Arabia would be playing “responsible role” as far as energy markets are concerned. It is expected that Saudi Arabia would be aiding the global supply in the energy markets. The market players were worried that once the energy markets start witnessing the negative impacts of the US sanctions on Iran, Saudi Arabia might go for cutting the crude supply. However, these concerns were eased when Saudi Arabia’s energy minister came forward to announce that it would not be adopting such actions and Saudi Arabia would be helping the world energy markets.

Why Australian Markets Ended on a Weaker Note: As widely expected by the market participants, the Australian markets ended lower. The primary reason for this downfall could be the negative momentum witnessed in the US markets. It seems like the Australian markets are walking on the footprints of the US markets as in the Australian markets also, the fall in the banking stocks have negatively impacted the markets. S&P/ASX200 ended the session at 5843.1 implying the fall of 61.8 points or 1.1%. Resolute Mining Limited (ASX: RSG) and Seven West Media Limited (ASX: SWM) finished the session lower by declining 11.255% and 6.667%, respectively.

However, WPP AUNZ Limited (ASX: WPP) witnessed a substantial fall because the company’s CEO has resigned and has lowered the guidance for the full year 2018. Also, a wide fluctuation was encountered in ImExHS Limited (ASX: IME) shares. Oil Search Limited (ASX: OSH) released the report for the September quarter and the company stated that it has witnessed positive impacts on the back of production recovery as well as heightened gas and oil prices.

Woolworths Supermarkets (ASX: WOW) might witness increased costs moving forward which could have a marginal impact on the company’s bottom line number. The company’s staff has said yes to the fresh enterprise agreement. As per the agreement, weekend penalty rates would be restored pushing the labour-related expenses of the company. In a ballot, the company saw that approximately 93% of the workforce which participated have given a thumbs up. Of the total workforce of the company i.e. 110,000, 62% participated in the ballot.

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