Daily Market View

U.S stocks fell on Friday as oil prices plunged to their lowest in more than a year, dragging down energy shares, while U.S-China trade talks at the G20 summit next week kept investors on edge in a truncated trading session. Benchmark Brent crude was down more than 6 percent on mounting concerns over rising global surplus, even as producers considered cutting output to curb supply. Oil majors Exxon Mobil Corp and Chevron Corp fell more than 3 percent and were the leading decliners on the Dow Jones Industrial Average. Oilfield service providers Schlumberger NV and Halliburton Co also fell nearly 3 percent. That pressured the S&P energy index, which fell 3.4 percent, the most among the 11 major S&P sectors. The energy sector has lost 16.5 percent since the beginning of October, making it the worst performing S&P sector during the period and putting it on pace for its biggest two-month drop since September 2011. Investors will be focusing on the G20 summit in Buenos Aires, where U.S President Donald Trump and his Chinese counterpart Xi Jinping are expected to hold talks.

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The Dow Jones Industrial Average fell for the fourth consecutive session on Friday. The Dow fell .73%, or 179 points. Shares of beleaguered social media company Snap Inc. fell 2.2% on Friday after rising more than 4% Wednesday on reports that the company was making it easier for businesses to create augmented reality lenses designed for the site. General Electric Co. was also declining Friday after getting a small reprieve Wednesday on reports that the company has set up $41 billion in credit lines from dozens of banks. GE shares fell 3.2%. The slide downward came after a post-Thanksgiving slump in pre-market trading that followed an underwhelming opening.

NASDAQ 100

The tech heavy NASDAQ pushed further into correction territory as markets add to their year-to-date losses. The major indices started trading in the red for the year this week after spending most of 2018 in positive territory. The NASDAQA fell .48% on Friday. Apple Inc. was down 2.54% to $172.29; Facebook was down 2.29% to $131.73 and Intel and Microsoft also slumped.

Oil

Oil prices slumped up to nearly 8 percent to the lowest in more than a year on Friday, posting the seventh consecutive weekly loss, amid intensifying fears of a supply glut even as major producers consider cutting output. Oil supply, led by U.S producers, is growing faster than demand and to prevent a build-up of unused fuel such as the one that emerged in 2015, the Organization of the Petroleum Exporting Countries is expected to start trimming output after a meeting on Dec. 6. But this has done little so far to prop up prices, which have dropped more than 20 percent so far in November, in a seven-week streak of losses. Prices were on course for their biggest one-month decline since late 2014. A trade war between the world’s two biggest economies and oil consumers, the United States and China, has weighed upon the market. U.S oil lost $4.21, or 7.7 percent, to trade at $50.42, also the weakest since October 2017. In post-settlement trade, the contract continued to fall. For the week, WTI posted a 10.8 percent decline.

Gold prices slipped on Friday as investors banked on the safety of the dollar over worries about a slowdown in the global economy, exacerbated by a sharp decline in oil prices. Spot gold fell 0.32 percent to $1,222.74 per ounce, while U.S gold futures for December delivery were down 0.39 percent to $1,223.10 per ounce. The dollar index is up and we are waiting for the U.S Federal Reserve this week, with Chairman Jerome Powell speaking. We expect he will be on course to continue with the interest rate hike in December. Prospects of higher U.S interest rates are negative for dollar-priced gold as they raise the opportunity cost of holding bullion. Crude prices are down and that pulls down the buying power of commodity accounts, so people are not buying gold. The dollar was on track to notch its biggest weekly percentage increase in a month, as markets were rattled by a steep drop in oil prices that suggested global growth is slowing. The greenback also benefited from a retreat in the euro, which slumped half a percent following a Purchasing Managers Index (PMI) survey that showed business growth in the euro zone had slowed much faster than expected this month. Gold, a traditional safe store of value during times of political and economic uncertainty, has lost out to the dollar this year, with the metal having fallen more than 10 percent from a peak in April against the backdrop of a U.S-China trade tussle. As far as gold is concerned, the dollar has become the more important driver for prices this year and that trend remains in place. Gold market participants have now turned eyes towards a G20 summit in Argentina at the end of the month, where leaders from the United States and China are expected to hold talks. Investors’ reluctance to react to trade tensions casts uncertainty on gold, raising the question of when demand will return. Meanwhile, silver fell 1.45 percent to $14.27 per ounce.

Traditional Agricultures

Wheat futures topped one-week highs on Friday on hopes for improved export demand after sales to Egypt, while corn and soybean futures slumped. Egypt’s state grain buyer, the General Authority for Supply Commodities, said it bought 240,000 tonnes of wheat in an international purchasing tender.

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