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On September 5th, U.S. Commerce Secretary Andrew Lutnick was appointed to review transactions between the Pentagon and companies under Cerberus Capital Management to address potential conflicts of interest. According to U.S. officials, the Department of Defense has assigned Lutnick to review these transactions. Cerberus is a private equity firm founded by Deputy Secretary of Defense Stephen Feinberg, with significant investments in defense and national security, including several companies that have received Pentagon contracts. After joining the government, Feinberg transferred his business assets to a trust for his adult children. Reports indicate that Lutnicks review of arrangements involving Cerberus is intended to exceed existing Department of Defense ethical guidelines. However, Lutnick previously led Cantor Fitzgerald, which has had a business relationship with Cerberus for over a decade and helped manage related investment funds. Some of Cerberus defense subsidiaries recently secured Pentagon contracts, including a $10 billion, 26-year Army helicopter pilot training contract for M1 Support Services, and a $90 million defense contract for hypersonic testing company Stratolaunch. It remains unclear whether Lutnik reviewed these transactions, and the specific scope of his review.Fitch: The rating upgrade reflects the strengthening of Portugals public finances, including the expected downward trend in government debt.Barclays: Oil outflows from the Middle East are higher than in the early stages of the conflict, but the market remains in a state of shortage, and the inventory buffer is now greatly reduced.According to Al Arabiya TV: Lebanese official data shows that Israeli airstrikes on southern Lebanon tonight have killed three people.On September 5th, stronger-than-expected US August jobs data triggered renewed bets on a possible Federal Reserve rate hike, but Wall Street risk assets did not show significant panic. Data showed increased resilience in the job market, leading traders to raise their expectations for a rate hike at the Feds September 16th meeting. US Treasuries experienced a sell-off, the dollar strengthened, and the S&P 500 fell on Friday but still recorded a weekly gain. Unlike previous rate hikes that often triggered capital outflows, this round of bond market adjustments has not yet spread to other risk assets. Credit spreads remain low, limiting pressure on corporate bonds and stock index markets. JPMorgan Chase stated that US Treasury liquidity has deteriorated significantly, but corporate bond ETFs and stock index futures markets have not yet experienced similar tension. Market resilience mainly stems from economic growth and corporate profits, especially as AI investment continues to drive large-scale capital expenditures by technology companies. Analysts point out that the market is currently more focused on whether yields will rise rapidly than on the jobs data itself. The market focus will shift to inflation data and whether the Fed will reconsider its rate hike path due to inflationary pressures. If yields rise further rapidly, it could force investors to reduce their risk exposure.

WTI justifies Thursday's Doji to advance to $69.00 with cautious optimism

Alina Haynes

Mar 17, 2023 13:44

 截屏2022-08-04 下午5.10.59_1024x576.png

 

On Friday, WTI crude oil shows modest gains near $68.65 as it recovers from its largest weekly loss since early December. In doing so, the energy benchmark justifies price-positive technical details while also drawing cues from the cautious optimism of the market.

 

Nevertheless, the bullish Doji candlestick formation on the daily chart combines with the oversold RSI (14) line to favor WTI crude oil's rebound from the lowest levels since December 2021. The most recent retreat of the US Dollar as well as prospects of overcoming the concerns of the 2008 financial crisis could bolster the corrective bounce.

 

It should be noted that the Bloomberg-shared headlines indicating China's gradual economic recovery, along with the discussions indicating a continuation of the Oil supply accord by the major energy producers, favor purchasers of black gold.

 

However, US President Joe Biden's drive to utilize the Strategic Petroleum Reserve (SPR) and the looming economic recession concerns emanating from US and European banks appear to impact on WTI prices. US Energy Envoy Amos J Hochstein stated earlier in the day that President Biden is committed to replenishing strategic oil reserves.

 

Notable is that Saudi National Bank's chairman Ammar Al Khudairy's remarks about Credit Suisse's "sound" conditions coincide with major US banks' efforts to assist California-based First Republic Bank in avoiding a liquidity crisis, thereby boosting the risk-on sentiment. Credit Suisse plans to borrow up to 50 billion Swiss francs (CHF) from the Swiss National Bank (SNB) to bolster liquidity, and Reuters cites anonymous sources as saying that US institutions are less susceptible to the Credit Suisse scandal. Moreover, US Treasury Secretary Janet Yellen's assurances regarding the health of the US banking industry and the European Central Bank's (ECB) 50 basis point (bps) rate rise, which was in line with expectations, also boosted sentiment and enabled the most recent increase in the Oil price.

 

On the contrary, a light calendar and the market's lack of faith in global policymakers' efforts to delay the financial crisis appear to drag on the price of oil.

 

Ten-year and two-year US Treasury bond yields display a lack of direction while reflecting market sentiment, as yesterday's rebound fails to supplant the two-week downtrend. However, Wall Street closed in the black with benchmark indices gaining more than 1.0%, while S&P 500 Futures remain lackluster as of late.

 

Moving forward, speculators should keep a watch on the Federal Open Market Committee (FOMC) monetary policy meeting the following week. Prior to that, initial readings of the US Michigan Consumer Sentiment Index for March and the UoM 5-year Consumer Inflation Expectations for the aforementioned month will be crucial for establishing distinct directions.

 


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