Breaking News
Investing Pro 0
Cyber Monday Extended SALE: Up to 60% OFF InvestingPro+ CLAIM OFFER

OPEC+ Meeting, ADP, Twitter Saga - What's Moving Markets

Economy Oct 05, 2022 07:14
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters.
 
LCO
+0.25%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
CL
+0.10%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
GBP/USD
-0.20%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
ESZ2
-0.18%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
1YMZ2
-0.12%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
NQZ2
-0.37%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 

By Geoffrey Smith 

Investing.com -- OPEC and its allies plot a big cut in oil output in defiance of U.S. President Joe Biden. ADP (NASDAQ:ADP) releases its estimate for private-sector hiring, a day after the Labor Department's Job Openings survey showed a sharp drop in vacancies. U.K. Prime Minister Liz Truss will try to restore some clarity over the direction of her policies. And the aftershocks of Elon Musk's surrender to Twitter reverberate through U.S. stock markets. Here's what you need to know in financial markets on Wednesday, 5th October. 

1. OPEC+ set to cut production quotas sharply

The world’s biggest oil exporters are set to agree on a hefty output cut from November at a meeting in Vienna.

Newswire reports suggest that the Organization of Petroleum Exporting Countries and its allies (chiefly Russia) will cut their output quota by as much as 2 million barrels a day in order to shore up falling prices, with some reports also hinting at further unilateral action by Saudi Arabia.

Any cut will be a major frustration for the administration of U.S. President Joe Biden, who has released millions of barrels from the Strategic Petroleum Reserve to bring domestic gasoline prices down before November’s mid-term elections.

Crude oil prices hit a three-week high on Tuesday as details of the members’ negotiating positions leaked out (and as U.S. inventory data surprised to the downside) but they have steadied overnight with U.S. crude trading down 0.1% at $86.41 a barrel, while Brent crude is down 0.1% at $91.73 a barrel.

2. Twitter stock doesn't quite believe the Musk takeover yet

Elon Musk is licking his wounds and Carl Icahn is counting his profits after Musk agreed to go through with his bid for Twitter (NYSE:TWTR) at the original price of $54.20, after trying to walk away from the deal during the summer.

Musk’s change of heart on Tuesday came only days before he was due to be deposed in connection with Twitter’s lawsuit in Delaware. However, the market is still not pricing the takeover as a done deal: Twitter stock fell 0.6% in premarket to $51.76, nearly 5% below Musk’s bid price.

The latest developments set the stage for what promises to be an interesting spectacle of a leveraged buyout carried out with prevailing interest rates at their highest level in over a decade. That will leave the barely-profitable social media company with an interest bill that will make Musk’s valuation even more challenging than it was originally.  

3. ADP report to add color to labor market picture

ADP will release its estimate of private-sector hiring in the U.S. in the month through mid-September, a day after the Labor Department announced one of the biggest ever monthly drops in job openings across the country.

The numbers were rocket fuel to a market that is increasingly open to betting on a policy pivot from the Federal Reserve. Comments after the data from Fed Governor Philip Jefferson and San Francisco Fed President Mary Daly poured cold water on those hopes, however, pushing the dollar up and risk assets down overnight.

The dollar gained half a percent overnight, helped by a 50 basis point hike from the Reserve Bank of New Zealand which dented hopes that its colleagues in Australia may have started a trend with their smaller 25 basis point hike on Tuesday. Poland, Romania, and Iceland all have their central bank meetings today.

4. Stocks set to open lower after wild surge; Fed damps pivot hopes

U.S. stock markets are set to give up around one-third of Tuesday’s gains at the open, as participants pause for breath after a wild short-covering rally.

By 06:25 ET (10:25 GMT), Dow Jones futures were down 286 points, or 0.9%, while S&P 500 futures and Nasdaq 100 futures were down by a similar amount.

Stocks likely to be in focus later include, naturally, Twitter and Tesla (NASDAQ:TSLA). The latter traded down 1.2% in premarket amid uncertainty over how much overhang will be created in the stock as Musk pledges shares against the loans he will need to buy the social media company.

5. Truss speech fails to ease pound, gilt concerns

U.K. Prime Minister Liz Truss tried to draw a line under the communications debacle that has been her first month in office, in a - relatively - clear speech to the Conservative Party’s annual conference.

Truss pledged that her government “will always be fiscally responsible” and also backed off previous threats to end the Bank of England’s independence, saying it was right that the central bank should set interest rates free of political interference.

However, she also stuck to her commitment to lower taxes without giving any corresponding detail about how her tax cuts will be funded. The pound lost nearly a cent against the dollar in anticipation of the speech and continued falling as it started. Government bonds didn’t like it either, the benchmark 10-Year yield rose 14 basis points to 4.00%.

 
 
 
OPEC+ Meeting, ADP, Twitter Saga - What's Moving Markets
 

Related Articles

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 Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
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?
 
Post
 
Replace the attached chart with a new chart ?
1000
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 Investing.com'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
Continue with Google
or
Sign up with Email