Breaking News
Investing Pro 0
Ad-Free Version. Upgrade your experience. Save up to 40% More details

Opening Bell: Oil Rout Wreaks Havoc Across Markets; Pound Drops

By (Pinchas Cohen/ OverviewNov 14, 2018 05:30
Opening Bell: Oil Rout Wreaks Havoc Across Markets; Pound Drops
By (Pinchas Cohen/   |  Nov 14, 2018 05:30
Saved. See Saved Items.
This article has already been saved in your Saved Items
  • WTI plunge dominates market moves
  • Futures, European shares drop on global energy-driven selloff, mixed Chinese data
  • Tech rout shows signs of bottoming
  • Pound looses ground ahead of key PM May's cabinet Brexit meeting

Key Events

Equities in Europe and US futures on the S&P 500, Dow and NASDAQ 100 took their cues from Asian selling amid oil's record 13-day loosing streak and mixed economic data from China.

The STOXX Europe 600 slid lower at the open, as jitters in the energy sector and WTI's ongoing slide continued to wreak havoc across markets. The price of the pan-European benchmark has been trading at the very bottom of the session, demonstrating no takers for the dip.

During the Asian session, energy producers weighed on Australian shares, with the S&P/ASX 200 (-1.74) underperforming its regional peers. Japan’s Nikkei 225 (+0.16) outperformed but slipped off its highs of the day, while shares edged lower in Hong Kong’s Hang Seng (-0.54%) , China’s Shanghai Composite (-0.85%) and South Korea’s KOSPI (-0.15%).

Global Financial Affairs

Yesterday, price glitches in energy stocks overshadowed Tuesday's newfound optimism over a trade deal—which remained mostly a matter of headlines rather than translating into any meaningful price action.

The morning session saw shares on an upswing after White House economic adviser Larry Kudlow told CNBC that he US and China are talking on “all levels” of government. That followed an overnight report that China’s Vice Premier Liu He will pave the way for a meeting between the leaders of the world's two biggest economies later this month.

However, oil’s stunning 7.07 percent plunge, or $4.24, which brought aggregate 12-day losses to 17.61 percent, or $11.90, sparked a selloff in the Energy sector (-2.30 percent), which in turn dragged the major indices lower.

Materials (-0.30 percent) and Industrials (+0.45 percent), which should have benefited from more upbeat trade headlines, failed to stand out, with sector heavyweights such as Caterpillar (NYSE:CAT) (+0.77 percent) and 3M (NYSE:MMM) (+0.68 percent) falling short of achieving larger gains.

The S&P 500 fell 0.15 percent for a total four-day setback of 3.3 percent. Financials (+0.56 percent) outperformed and Utilities (+0.42 percent) managed to post a relatively upbeat performance.

The Dow Jones Industrial Average dropped 0.4 percent for a combined three-day loss of 3.45 percent. Technically, the price yesterday fell below the 100 DMA, rebounded intraday to the underside of the moving average and fell back down. However, after reaching 0.35 percent above the 200 DMA, it closed off the low of the day, about 0.7 percent above the most observed moving average.

The NASDAQ Composite remained flat yesterday. However, with a four-day loss of 4.89 percent, it still was the worst performing index during this rout. However, it is noteworthy that the tech-heavy benchmark manage to limit losses to 0.03 percent amid an ongoing tech drubbing, even after Apple (NASDAQ:AAPL) admitted to a serious problem with its iPhone. Might this be signaling the end of the tech-led selloff?

Apple Daily Chart
Apple Daily Chart

Apple fell 1 percent during yesterday's session, bringing its four-day dip to a whopping 7.75 percent. Technically, the price slid below the 200 DMA for the first time since April, which is bearish, but it formed an inverted hammer, a bullish candlestick, which may suggest an upward correction within a short-term and mid-term downtrend, within a long-term uptrend.

The uptrend line since May 2016, is currently below $180, about 8 percent below the current price, and rising. Traders could wait with a long position for a further fall to the full correction of the long-term uptrend or for an upward correction within the short and mid-term downtrends for a short.

The Russell 2000 gave up 0.16 percent, its fourth day of losses for a combined drop of 4.35 percent. Technically, the 50 DMA is on top of the 200 DMA and about to execute a Death Cross.

UST 10-year Daily Chart
UST 10-year Daily Chart

The yield on 10-year Treasurys ticked lower for a fourth day, about halfway down to the neckline of a double-top. For now, it found support of the 50 DMA.

In FX markets, the dollar recouped some of yesterday’s losses, tracking higher Treasury demand.

GBP Daily Chart
GBP Daily Chart

The pound dropped as traders waited to see whether Theresa May can persuade her cabinet to back her Brexit deal at a key meeting today. Technically, cable is forming a symmetrical triangle, presumed to be a continuation pattern, as both supply and demand increase positions, till they meet in the middle. The trend is decided with a decisive breakout, up or down.

India's rupee rallied to an almost two-month high and the country's sovereign bonds gained ground as the slump in oil prices deepened, easing investor concerns over the oil-importing nation’s current account deficit.

Focus will now turn to Federal Reserve Chair Jerome Powell's speech later today, with some observers expecting Powell will calm worries that the central bank is pushing its interest rate hike cycle too far. That comes after the latest read on China’s economy, where retail sales missed estimates, though industrial production held up. Any signal from the Fed may thereby help shed more light on the overall 'end of global growth' narrative.

Up Ahead

  • Fed Chairman Jerome Powell discusses national and global economic issues with Dallas Fed President Robert Kaplan at an event hosted by the Dallas Fed.
  • US consumer inflation probably rebounded in October after easing in September. CPI data is projected to show a 0.3 percent increase on Wednesday.
  • Also today, UK Prime Minister Theresa May will ask her divided Cabinet ministers to back her Brexit deal or quit at a meeting.
  • Canadian ADP Nonfarm Employment Change is released Thursday.

  • Policy decisions are coming from central banks in Mexico, Philippines, and Thailand.

Market Moves


  • Canada’s S&P/TSX Composite closed down 0.16 percent Tuesday.

  • Futures on the S&P 500 fell 0.3 percent as of 8:09 a.m. London time, hitting the lowest level in two weeks with their fifth consecutive decline.
  • The Stoxx Europe 600 slid 0.8 percent to the lowest level in more than two weeks.
  • The UK’s FTSE 100 Index gave up 0.6 percent to the lowest level in almost three weeks.
  • Germany’s DAX Index lost 0.8 percent.
  • The MSCI Asia Pacific Index fell 0.2 percent to the lowest level in two weeks.
  • The MSCI Emerging Market Index dropped 0.3 percent, reaching the lowest level in two weeks on its fifth straight decline.


  • The Canadian loonie was up 0.08 percent against the U.S. greenback early Wednesday, trading at 0.7562.
  • The Bloomberg Dollar Spot Index climbed 0.1 percent.
  • The euro slipped 0.1 percent to $1.128.
  • The British pound fell less than 0.05 percent to $1.2972.
  • The Japanese yen dipped 0.1 percent to 113.87 per dollar.


  • Canada's 10-year yield was down early Wednesday at 2.453, a 0.16-percent decrease.
  • The yield on 10-year Treasuries gained less than one basis point to 3.14 percent.
  • Germany’s 10-Year yield dropped two basis points to 0.39 percent, the lowest level in two weeks.
  • Britain’s 10-Year yield lost four basis points to 1.484 percent.
  • The spread of Italy’s 10-year bonds over Germany’s rose 13 basis points to 3.1698 percentage points to the biggest premium in three weeks.


  • West Texas Intermediate crude fell 0.4 percent to $55.47 a barrel, hitting the lowest level in 11 months with its 13th straight decline.
  • Gold fell 0.1 percent to $1,200.90 an ounce.

Opening Bell: Oil Rout Wreaks Havoc Across Markets; Pound Drops

Related Articles

FactSet Research Systems Inc
Podcast: Evergrande, US Futures, Central Banks in Focus By FactSet Research Systems Inc - Sep 23, 2021

US futures are indicating a higher open as of 05:00 ET. Central banks in focus with Norges Bank, SNB, and BoE policy announcements this morning, following the FOMC announcement...

Opening Bell: Oil Rout Wreaks Havoc Across Markets; Pound Drops

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email