By Geoffrey Smith
Investing.com – Stocks are expected to extend their rally at the open, supported by a looming deal to temporarily delay the debt ceiling crisis and a sharp price reversal in the wake of Vladimir Putin’s jawbone on Wednesday. Weekly jobless claims are due and Amazon’s Twitch service (NASDAQ 🙂 suffers a major hack. German industrial production fell in August, and Joe Biden and Xi Jinping agreed in principle to meet virtually before the end of the year, which appears to be another temporary sign of improving US-China relations. Here’s what you need to know about the financial markets on Thursday, October 7.
1. Can you drive a ceiling down the street?
The United States has avoided – for now – the risk of a damaging default on its debt as Senate Minority Leader Mitch McConnell from the debt ceiling until early December.
The offer comes with a condition: Democratic lawmakers must tie a dollar level to the new cap required by the extension. Senate Majority Leader Chuck Schumer said the offer was likely to be accepted.
The market’s reaction to Wednesday’s news underscored how much such concerns have weighed on recent performance in U.S. markets, even though the ritual political theater accompanying the debate has been a hallmark of U.S. politics for the past 25 years. It is also a reminder of the heavy political price that could be paid by any party considered responsible for the failure of the government. drifted around the 1.52% level overnight.
2. The European energy crisis fades after Putin’s intervention
Another market enjoying at least a temporary reprieve was the European natural gas market, where spot prices in the UK fell by as much as 49% in response to signs that Russia is prepared to increase its supplies of gasoline. Europe. The easing of some 7%
A carefully managed step on Wednesday hinted at the prospect of an increase in flows, against an unspoken subtext according to which it would depend on the authorization of a rapid start of shipments via the Nord Stream 2 pipeline. He also criticized the Europe’s attempts to give the spot market a greater role in price formation and repeated Russia’s offer of new long-term contracts, as well as its continued desire to own and operate gas facilities. storage in Europe.
Political opposition to these two points in Europe remains strong, for reasons of security of supply. However, the precarious position of the European economy can undermine this. fell 4% in August, the second set of disappointing data from Europe’s largest economy in as many days.
3. Stocks should open to the upside; weekly unemployment claims in sight
US stocks are expected to extend their rally when markets open later, supported by both the debt ceiling deal and energy price relief.
At 6:15 am ET (10:15 GMT), they were up 195 points, or 0.6%, to their highest level in 10 days, while they were up 0.7% and 1.0%.
Actions likely to be finalized later include Amazon, after its, and Royal Dutch Shell (LON :), which said it expected a $ 400 million impact on hurricane profits. Ida. reports its profits, shedding new light on the ability of firms to pass higher input prices on to consumers.
The data schedule is headed by weekly, while the New York Federal Reserve chief is also expected to speak.
4. Biden – Xi meeting agreed
US President Joe Biden and his Chinese counterpart Xi Jinping by the end of the year, the White House has announced. The news comes on top of signs of a thaw in US-China relations, despite the Biden administration’s refusal so far to lift any of the sanctions imposed by his predecessor Donald Trump.
U.S. officials who met in Zurich informed media outlets that the talks were more productive than the previous exchange in Anchorage, Alaska a few weeks ago.
This development follows a resolution of a long-standing issue in bilateral relations in September, which saw Huawei’s chief financial officer in Canada and was allowed to return home, in return for agreeing to a declaration of made the Department of Justice which could give the United States a stronger legal case for sanctions against the Chinese telecommunications company.
5. Oil slows on jump in inventories, reports SPR publication
Crude oil prices fell overnight, dragged down by changes in natural gas prices and weighed down by reports that the United States could sell oil from them. This is in addition to government data showing a startling in US stocks last week.
Reports also suggest that the Biden administration is considering reintroducing a ban on crude oil exports, which was lifted by Donald Trump after being in place for nearly four decades.
As of 6:30 a.m. ET, futures were down 1.7% to $ 76.08 per barrel, while they were down 1.3% to $ 80.08 per barrel.