Market Brief: Oil Surges 14% on Saudi Oil Strike, FX Impact Limited
Matt Weller, CFA, CMT September 16, 2019 4:06 PM
- The weekend’s drone strikes on oil refineries in Saudi Arabia dominated markets, with oil prices ultimately finishing the day around 13% higher, its fourth-largest one day rise on record. Tensions in the region remain elevated with US authorities blaming the attack on Iran.
- FX: The oil-sensitive loonie was predictably the strongest major currency today, though it only rose about 0.3% against the greenback. European currencies brought up the rear, with both the euro and pound falling against their rivals.
- Commodities: Gold tacked on about 0.5% in general risk-off trade.
- US indices finished roughly 0.5% lower today, as oil prices represent a key cost for most firms (not to mention the potential impact on consumer spending).
- Energy (XLE) was by far the strongest sector, gaining roughly 4% in its biggest one-day rise this year. Material stocks (XLB) were the weakest sector on the day.
- Stocks on the move:
- Oil companies were big beneficiaries of the surge in oil prices, with megacaps Exxon Mobile (XOM, +1%) and Chevron (CVX, +2%) both bucking the bearish trend in broader markets.
- General Motors (GM) dropped -4% after 50k UAW workers began a potentially long strike.
- Overstock.com (OSTK) fell another -21% to unwind about half of the short squeeze that was driving the troubled retailer in the first half of the month.
Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.