World stocks lower on oil, Fed... Wells Fargo says Fed will increase rates next month... Metals won’t recover without China says Goldman Sachs...
World stocks lower on oil, Fed
Friday 13th is already proving to be unlucky for investors as world stock markets are hit by fear of weak economies and US interest rates.
Asian markets closed with losses across the board as oil hit lows not seen for more than two months and gold and copper fell to near 6-year lows as the greenback strengthened. Hong Kong, Sydney and Shanghai saw the sharpest losses.
In Europe data showing a slower pace of growth than expected has added to other concerns to push equities lower so far. The 0.3 per cent quarter-on-quarter growth of the Eurozone countries was down from 0.4 per cent in the previous quarter. The economies of individual member states is also concerning with Germany down to 0.3 per cent (from 0.4 per cent in the previous quarter) and Italy down to 0.2 per cent (from 0.3). France did better with growth of 0.3 per cent after a flat previous quarter.
Toronto and Wall Street are expected to open flat ahead of US jobs data at 8.30am ET.
Wells Fargo says Fed will increase rates next month
Wells Fargo Private Bank economist Erik Davidson has little doubt that the Fed will raise interest rates at its December meeting: "It is a foregone conclusion that the Fed will raise rates. We believe it will be in December” he told clients Thursday. In the event of a delay in the rise, it will likely come in March, Davidson said, as later than that would be during an election cycle. He noted that the increase will be a shock to many: "People under 50 have never seen rates go up (as adults).”
Metals won’t recover without China says Goldman Sachs
The metals market is in a state of flux with prices falling along with demand. Goldman Sachs said in a client note that "Only a major pick-up in Chinese demand is likely to be sufficient to balance metals markets such as copper and aluminium.” The note highlighted the lack of pace in China’s growth this year despite 6 interest rate cuts and called the situation “of increasing concern.”
Friday 13th is already proving to be unlucky for investors as world stock markets are hit by fear of weak economies and US interest rates.
Asian markets closed with losses across the board as oil hit lows not seen for more than two months and gold and copper fell to near 6-year lows as the greenback strengthened. Hong Kong, Sydney and Shanghai saw the sharpest losses.
In Europe data showing a slower pace of growth than expected has added to other concerns to push equities lower so far. The 0.3 per cent quarter-on-quarter growth of the Eurozone countries was down from 0.4 per cent in the previous quarter. The economies of individual member states is also concerning with Germany down to 0.3 per cent (from 0.4 per cent in the previous quarter) and Italy down to 0.2 per cent (from 0.3). France did better with growth of 0.3 per cent after a flat previous quarter.
Toronto and Wall Street are expected to open flat ahead of US jobs data at 8.30am ET.
| Latest | 1 month ago | 1 year ago | |
| North America (previous session) |
|||
| US Dow Jones | 17,448.07 (-1.44 per cent) | +2.14 per cent | -1.16 per cent |
| TSX Composite | 13,127.18 (-1.61 per cent) | -5.18 per cent | -11.18 per cent |
| Europe (at 6.00am ET) |
|||
| UK FTSE | 6,136.70 (-0.68 per cent) | -3.24 per cent | - 7.52 per cent |
| German DAX | 10,754.19 (-0.26 per cent) | +7.19 per cent | +16.28 per cent |
| Asia (at close) |
|||
| China CSI 300 | 3,746.24 (-1.29 per cent) | +8.74 per cent | +45.22 per cent |
| Japan Nikkei | 19,596.91 (-0.51 per cent) | +7.47 per cent | +12.67` per cent |
| Other Data (at 6.00am ET) |
|||
| Oil (Brent) | Oil (WTI) | Gold | Can. Dollar |
| 44.65 (+1.34 per cent) |
41.95 (+0.48 per cent) |
1083.00 (+0.19 per cent) |
U$0.7526 |
| Aus. Dollar |
|||
| U$0.7137 | |||
Wells Fargo says Fed will increase rates next month
Wells Fargo Private Bank economist Erik Davidson has little doubt that the Fed will raise interest rates at its December meeting: "It is a foregone conclusion that the Fed will raise rates. We believe it will be in December” he told clients Thursday. In the event of a delay in the rise, it will likely come in March, Davidson said, as later than that would be during an election cycle. He noted that the increase will be a shock to many: "People under 50 have never seen rates go up (as adults).”
Metals won’t recover without China says Goldman Sachs
The metals market is in a state of flux with prices falling along with demand. Goldman Sachs said in a client note that "Only a major pick-up in Chinese demand is likely to be sufficient to balance metals markets such as copper and aluminium.” The note highlighted the lack of pace in China’s growth this year despite 6 interest rate cuts and called the situation “of increasing concern.”
