Technical & Fundamental Oil Reports Specialists

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Risky assets are back in fashion, at least for now.

Published Friday, August 28th, 2015

  • Wall Street logs biggest two-day gain since financial crisis
  • Oil soars over 10%, biggest gain in six years as shorts scramble

The above headlines sum up nicely yesterday’s performances, both in the stock and oil markets. In hindsight, the writing was on the wall for the stock market. We know that positive US economic data is bearish because it will bring the dreaded interest rate hike closer. A bigger-than-expected fall in US jobless claims, an upward revision in US 2Q GDP growth to 3.7% from the previous estimate of 2.3% and rising July US pending home sales is normally enough to raise concerns about an early rate increase and therefore send share prices lower.

Not this time around however, as just a day earlier the president of the New York Fed pointed the finger at the Chinese stock market crash when he said that the prospect of a September rate hike “seems less compelling” than it was only weeks ago. So, the US economy in a seemingly healthy state and no rate rise on the horizon naturally triggers a buying spree. As a result the DJIA settled 2.27% up and the S&P 500 index 2.43% higher on the day. The big jump is being felt in Asia this morning with the Shangai Composite Index gaining 4.90% and the Nikkei 225 Index trading 3.03% above Thursday’s settlement.

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Posted by Tamas Varga

Tamas Varga has been in the oil industry since 1992 and with PVM for 18 years. During his time in the industry he has gathered a range of experience in the oil markets. At PVM Tamas is in charge of data collection and analysis.