Top Ranked Momentum Stocks to Buy for January 5th

Bloomberg
Nasdaq 100 Tumbles, Ends 11% Below Feb. 12 Record: Markets Wrap
(Bloomberg) -- Tech shares tumbled anew, sending the Nasaq 100 Index down 11% from its all-time high, as investors fled high-valuation stocks for companies whose fortunes are closely tied to the economic cycle.The benchmark for megacap tech dropped 2.9% and is now at the lowest since November. The S&P 500 ended lower after rising as much as 1% as tech shares in the gauge dropped 2.5%. Financial firms and materials producers kept losses from being worse. The Dow Jones Industrial Average hit an all-time high before settling for a 1% gain, buoyed by rallies in banks and Walt Disney Co. Tesla Inc. pushed its five-day rout past 20%. Blank-check companies backed by Chamath Palihapitiya tumbled.The 10-year Treasury rate jumped toward 1.6%, while the dollar strengthened. Brent crude briefly traded near $70 a barrel before pulling back. Gold slumped and Bitcoin traded above $51,000.Investors embraced the prospect for a surge in global economic growth as vaccine distribution improves and the U.S. heads toward passing a $1.9 trillion spending bill. The risks associated with rising Treasury yields remain an overhang amid fears that government aid programs could overheat economic growth.“You will see a lot of volatility in markets,” Kim Stafford, Asia Pacific head at Pacific Investment Management Co., said on Bloomberg Television. “We believe that confidence is improving, especially with vaccines coming online, so we will see an uptick in growth globally. There are a lot of reasons to be confident in the market, but a lot of this is also priced in.”There are also questions about whether equity valuations have become excessive, especially in speculative tech shares. The Nasdaq 100 Index has fallen about 8% since early February.Crash Landing on Stock Heroes of Yesteryear Is Worst in a DecadeHere are some key events to watch:The annual session of China’s National People’s Congress continues in Beijing.Japan GDP is due Tuesday.EIA crude oil inventory report is due WednesdayThe U.S. February consumer price index will offer the latest look at price pressures Wednesday.The European Central Bank holds its monetary policy meeting and President Christine Lagarde is set to do a briefing Thursday.These are some of the main moves in markets:For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
2h ago
Yahoo Finance
Stock market news live updates: Dow rallies while Nasdaq slides into a correction as tech rout deepens
Stocks were mixed on Monday and Treasury yields climbed further after Congress made headway toward passing another significant COVID-19 relief package.
2h ago
Reuters
Analysis: Iran slips record volume of oil into China, reaches out to Asian clients for trade resumption
Iran has quietly moved record amounts of crude oil to top client China in recent months, while India's state refiners have added Iranian oil to their annual import plans on the assumption that U.S. sanctions on the OPEC supplier will soon ease, according to six industry sources and Refinitiv data. U.S. President Joe Biden has sought to revive talks with Iran on a nuclear deal abandoned by former President Donald Trump in 2018, although harsh economic measures remain in place that Tehran insists be lifted before negotiations resume. The National Iranian Oil Company (NIOC) has started reaching out to customers across Asia since Biden took office to assess potential demand for its crude, said the sources, who declined to be named because of the sensitivity of the matter.
15h ago
Reuters
Gold slumps to 9-month trough as yields, dollar erode appeal
Spot gold fell 0.7% to $1,689.87 per ounce by 1523 GMT, after hitting its lowest since June 8 at $1,683.68 earlier. The dollar climbed to a three-month peak, while the U.S. 10-year Treasury yield held close to a more than one-year high, increasing the opportunity cost of holding gold, which pays no interest. "We have an economy that is recovering and inflation is materializing; that ultimately means that yields have room to move higher," said Bart Melek, head of commodity strategies at TD Securities, adding that gold could fall further towards $1,660 as a result.
21h ago
Reuters
Analysis: Iran slips record volume of oil into China, reaches out to Asian clients for trade resumption
Iran has quietly moved record amounts of crude oil to top client China in recent months, while India's state refiners have added Iranian oil to their annual import plans on the assumption that U.S. sanctions on the OPEC supplier will soon ease, according to six industry sources and Refinitiv data. U.S. President Joe Biden has sought to revive talks with Iran on a nuclear deal abandoned by former President Donald Trump in 2018, although harsh economic measures remain in place that Tehran insists be lifted before negotiations resume. The National Iranian Oil Company (NIOC) has started reaching out to customers across Asia since Biden took office to assess potential demand for its crude, said the sources, who declined to be named because of the sensitivity of the matter.
15h ago
CoinDesk
Bitcoin’s Stimulus-Led Rise Fades as Stocks Drop, Dollar Gains
Stronger bond yields and a rising dollar are capping price progress for risk assets.
12h ago
Bloomberg
Upbeat Chinese Data May Not Ease Emerging-Market Taper Gloom
(Bloomberg) -- The prospect of rising inflation and U.S. Treasury yields may damp emerging-market sentiment, reflected by a slump in Chinese assets despite trade data that pointed to a speedier global recovery from last year’s lockdown.Exports from the world’s second-biggest economy soared in the first two months of the year, data showed Sunday, reflecting a recovery in external demand and providing a much-needed boost for risk assets after a turbulent start to March. Meantime, the U.S. Senate passed a $1.9 trillion stimulus package Saturday that may offer an additional spur to countries such as Mexico whose economies are most sensitive to U.S. growth.Emerging-market stocks fell to a two-month low and currencies were poised for their worst session in a year on Monday as anxiety remains high in the bond market after Federal Reserve Chairman Jerome Powell’s dovish message last week stopped short of trying to rein in the surging yields. An index of dollar-denominated debt in the developing world dropped for a fourth week in its longest losing streak since 2018. Local-currency notes also declined amid selloffs from Poland to Hungary and Mexico.“All fixed-income assets face a challenging market as rates and inflation become more of a threat,” said Abdul Kadir Hussain, Dubai-based head of fixed-income asset management at Arqaam Capital. “Emerging markets are no different. We have already seen outflows from emerging-market fixed-income funds, and I suspect that will continue in the near term.”Last week, exchange-traded fund investors withdrew money from emerging-market bonds, while adding to stocks, as they weighed the prospects of stronger global growth and a pickup in U.S. yields.Inflation data this week will offer evidence of whether that caution is merited. Economists expect consumer prices to have picked up in places such as Taiwan, India and Brazil. Elsewhere, Peruvian policy makers will probably keep the key interest rate at a record low of 0.25%.Listen to the EM Weekly Podcast: Improving China Data; Rising Treasury YieldsInflation WatchTaiwan’s consumer prices probably rose last month after declining in January, according to a Bloomberg survey before the report on Tuesday. Export figures the same day may reveal growth slowed in February after the island exported a record the previous monthThe improving global trade outlook and backdrop for exports will probably buoy the Taiwan dollar, according to Gao Qi, a currency strategist at Scotiabank in SingaporeIndia’s consumer-price inflation probably accelerated further above the central bank’s 4% target, a Bloomberg survey showed. That could limit its capacity to keep monetary conditions accommodativeThose figures may put further upward pressure on Indian bond yields, which are already at a 10-month highA reading of Brazil’s February consumer-price inflation on Thursday will be the last before the central bank meets later this month to decide on the key policy rateEconomists expect that inflation climbed last monthMexico’s February inflation probably increased amid higher non-core prices, data on Tuesday may showArgentina is likely to report another month of high inflation when it releases February figures on ThursdayChile’s monthly inflation eased in February on a drop in food costs, corroborating the central bank’s message that a recent consumer price jump is temporary and stimulus will be kept in placeKey DataChinese data due this week will provide another update on the nation’s economy after authorities announced a conservative growth target for this year at the National People’s Congress on FridayAfter containing the pandemic and becoming the only major economy to expand in 2020, officials now want to address imbalances such as a dependence on investment in property and infrastructure funded by corporate debtOn Sunday, Chinese Foreign Minister Wang Yi warned the U.S. to stop “crossing lines and playing with fire” when it comes to Taiwan, which Beijing claims sovereignty overAggregate financing numbers for February due between March 9 and 15 may show a slowdown due to seasonal factors. Inflation figures on Wednesday are expected to show consumer prices dropped for a second month in February, further enhancing the allure of Chinese bondsBrazil’s January economic activity and retail sales figures will also be released next week, offering clues on the pace of a rebound in Latin America’s largest economyIn politics, traders will watch for progress on an emergency spending bill as it moves through the lower house. Jitters over fiscal spending have contributed to the real becoming the worst-performing currency in emerging markets this yearTurkey’s January current-account deficit due Thursday may narrowThe lira has posted losses for two straight weeksREAD: Economist Who Called 2018 Turkey Crash Sees New Boom, BustSouth Africa will report its fourth-quarter current-account surplus on Thursday, which is forecast to have narrowedThe country is also expected to report manufacturing production data on the same dayOn Friday, Mexico will post January industrial production figures, which will give investors a better look at how activity is recoveringPeruvian policy makers will probably keep a dovish outlook on Thursday by holding borrowing costs at 0.25%, the lowest among major Latin American economies, according to a forecast by Bloomberg EconomicsFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
6h ago
FX Empire
Gold Price Futures (GC) Technical Analysis – Strong Move Over $1711.70 Could Mean Gold Hit Bottom on Friday
The direction of the April Comex gold market on Monday is likely to be determined by trader reaction to the major Fibonacci level at $1711.70.
1d ago
Yahoo Finance
A glossary of the Federal Reserve's full arsenal of 'bazookas'
A breakdown of the Fed's arsenal of tools launched to provide liquidity to the economy in the wake of the coronavirus.
8h ago
Bloomberg
Central Banks Face Jumpy Bond Market With 10 Days of Decisions
(Bloomberg) -- Central banks helped save the world economy from depression as the pandemic struck. Now they are dealing with the hard part: managing the recovery amid a difference of opinion with investors.Optimism that Covid-19 vaccines and continued government stimulus offer an escape from the worst health crisis in a century has sent bond yields soaring and pushed bets on rising inflation in the U.S. to the highest in a decade.That’s shifting the ground underneath monetary policy makers who promise to maintain rock bottom borrowing costs and cheap money well into the expansion. In the next two weeks, the Federal Reserve and European Central Bank as well as their counterparts in Japan, U.K, and Canada are all likely to reiterate those pledges, eager to secure a rebound in hiring and avoid the mistakes of the last crisis when some withdrew support too early.The risk now seems skewed the other way. While policy makers welcome a modest rise in bond yields as a signal of confidence in the economic outlook, they worry an unchecked jump would undercut recoveries. They argue any resurgence in inflation will be based on a temporary correction from last year’s slide and that high unemployment will continue to restrain price pressures.It’s a stark turnaround from a year ago, when the world powered down to fight the Covid-19 pandemic and central banks responded with what’s amounted to an unprecedented $9 trillion of monetary support.“Central banks are facing a new challenge,” said Rob Carnell, chief economist for Asia Pacific at ING Bank NV. “How do they keep justifying easy policy as the recovery continues and the inflation figures pick up?”Canada, ECBThe Bank of Canada is first up with a meeting on March 10 when policy makers are likely to indicate they plan to maintain plenty of stimulus well into any strong recovery. It’s a case that Governor Tiff Macklem laid out last month when he argued policy needs to help foster not only the immediate pickup but also facilitate virus-driven structural changes like digitalization.ECB President Christine Lagarde convenes officials the next day when updated forecasts will highlight how the euro-area economy is lagging the U.S. because of slow vaccine rollouts and extended virus restrictions. That puts the bloc at risk should higher global yields spill over into borrowing costs for companies and households.ECB policy makers have surprised investors by downplaying their concerns so far, saying their bond-buying program is flexible enough to address unwarranted tightening but failing to provide any evidence that they’re accelerating purchases. At the back of their minds though is likely to be the experience of 2011 when interest rates were raised twice to combat faster inflation despite a worsening financial crisis, only for the euro zone to slide into a double-dip recession.Powell PressureAt the Fed’s policy meeting on March 16-17, Chairman Jerome Powell will likely reaffirm his looser for longer stance. Powell repeatedly stressed during remarks on Thursday that the Fed was a long way from its goals and was not close to tightening policy. He also played down a likely rise in inflation this year and ducked questions on a possible response to the recent sharp rise in yields.While the move had “caught’ his attention, he said Fed policy was currently appropriate, though it has tools to respond if there is a material change in the outlook.Transcripts of the Fed’s meetings from 2015, when it last began a tightening cycle, suggested policy makers overestimated the potential for accelerating inflation and underestimated the room still left in the economy to generate jobs.What Bloomberg Economics Says...For the U.S., rising bond yields are largely a reflection of confidence in the strength of the recovery. For much of the rest of the world, the spillover of higher borrowing costs is arriving too soon. The Reserve Bank of Australia has already reacted with bigger bond buys. Others may also have to tweak their policy settings.-- Tom Orlik, chief economistClick here for moreTaper TalkThe Bank of England convenes on March 18. It has lined up a further 150 billion pounds ($208 billion) of asset purchases over 2021 with plans to taper weekly buying later in the year.A hugely stimulative budget from Chancellor Rishi Sunak now has economists further discounting the prospect of negative interest rates and instead looking forward to a tightening of monetary policy.The central bank has said that won’t happen until there is clear evidence that spare capacity is being eliminated and it’s closer to sustainably achieving its 2% inflation target, but in February announced it was considering whether to alter previous guidance that it wouldn’t unwind its asset purchases until the bank rate reached 1.5%.Speaking on Monday, Governor Andrew Bailey reiterated the bank doesn’t intend to tighten monetary policy until there’s clear evidence the economy is absorbing excess capacity. He added that risks to the economy remain tilted to the downside, BOJ, PBOCThen it’s the Bank of Japan’s turn on March 18-19, when officials are scheduled to unveil details of a policy review that will look at how it controls yields, negative rates and asset buying. Governor Haruhiko Kuroda has said the central bank is seeking to make its policy framework more effective by fine tuning it rather than overhauling it.He has also signaled there won’t be any changes to the movement range around the 10-year yield target. Still, Deputy Governor Masayoshi Amamiya ssignaled on Monday that the central bank may seek ways to allow more moves in yields. While developed-world central banks will likely be unified in pledging ongoing stimulus, China’s officials are already signaling the opposite. Guo Shuqing, chairman of the China Banking and Insurance Regulatory Commission -- the top banking regulator -- said on March 2. he’s “very worried” about risks emerging from bubbles in global financial markets and the nation’s property sector, stoking expectations of policy tapering.That was followed by the government setting a conservative growth target of above 6% for the year, well below what economists forecast the nation will achieve, as Premier Li Keqiang on Friday opened the National People’s Congress in Beijing.The tension between inflation and cheap money is already forcing some emerging market central banks to move. Ukraine unexpectedly raised interest rates to counter the highest inflation in more than a year. Brazil is forecast to start raising borrowing costs on March 17 having promised in August to keep its 2% benchmark for the “foreseeable future.”(Adds comments from UK and Japanese central bankers)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
12h ago
Oilprice.com
The Single Biggest Threat To The Electric Vehicle Revolution
A growing semiconductor shortage could hamstring the EV boom in 2021. Here’s who could profit in the days ahead
23h ago
Yahoo Finance
Rising interest rates are a good sign for stocks
Top news and what to watch in the markets on Monday, March 8, 2021.
13h ago
FX Empire
AUD/USD and NZD/USD Fundamental Weekly Forecast – Higher-Risk Currencies Could Benefit from COVID Relief Bill
The potential market moving event this week occurred over the weekend when the U.S. Senate passed a $1.9 trillion coronavirus relief package.
1d ago
FX Empire
U.S. Dollar Index (DX) Futures Technical Analysis – Strengthens Over 92.310, Weakens Under 91.705
Friday’s price action suggests the direction of the March U.S. Dollar Index on Monday will be determined by trader reaction to 92.310.
1d ago
Bloomberg
Good Economic News Is Becoming a Double-Edged Sword for Markets
(Bloomberg) -- A rapid souring in financial markets on Monday highlights how even the most positive news for the world economy is no fillip to risk assets weighed down by the anchor of the global bond market.Such is their sensitivity to rising Treasury yields, that the weekend approval of a $1.9 trillion U.S. stimulus package and a surge in China’s exports sent U.S. equity futures and other risk-sensitive assets lower. The Turkish lira and South African bonds tumbled while stocks sold off across much of Asia as the 10-year Treasury yield briefly pushed beyond 1.60%.“Profit taking is not over yet, given that the yield continues rising and investors have become cautious,” said Jackson Wong, Hong Kong-based asset management director at Amber Hill Capital Ltd. “The 10-year bond yield at around 1.6% is not good for asset valuations and there is no prospect that the yield increase will stop in the near-term.”Improving data and the imminent passing of the second-biggest stimulus program in U.S. history has turned optimism about a recovery into fears of an overheating economy triggering sooner-than-expected rate hikes. The very measures policy makers have been pushing to fight the pandemic are now fueling volatility in bond and equity markets and spurring a rethink of stretched valuations in assets across the world.“Longer-term yields are likely to stay elevated and possibly so elevated that they cast a nasty pall over risk assets,” said Steven Barrow, head of FX strategy at Standard Bank. “We could see 10-year yields at 2%, or more by the middle of the year”Man Group Plc has warned emerging-market debt is nearing a tipping point as U.S. yields climb, while BlackRock Inc. said there was no immediate end in sight to a bond selloff that has drawn comparisons with the 2013 taper tantrum.For Sue Trinh, managing director for global macro strategy at Manulife Investment Management, the key market to watch now is credit, which has remained relatively unshaken amid broad financial conditions that are still easy.Among the key moves in markets on Monday:Nasdaq futures lost as much a 2.2%; the yield on 10-year Treasuries jumped as much as 5 basis points to 1.61%The Turkish lira fell 1.6%, making it the worst-performing emerging market currencyYields on 10-year South African bonds, a bellwether for risk assets, rose 25bps to 9.5%The Bloomberg Dollar Spot Index reversed losses to trade 0.5% higher, extending last week 0.9% advance“Momentum is strong in the bond selloff,” said Manulife’s Trinh. “We are in Fed blackout now for the next week and the risk is that momentum takes on a life of its own.”While the U.S. stimulus package needs to go back to the House for a final vote expected Tuesday, economists are already boosting their forecasts for growth. And though an advance in Treasury yields is often seen as a sign of economic strength, the pace of the move has sparked concern about a disorderly spiral downwards in bond prices.“A rise of another 50 basis points – toward 2% on the 10-year U.S. Treasury – leaves markets highly vulnerable to correction,” said John Velis, a strategist at BNY Mellon.(Updates prices, adds BNY Melon comment in final paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
12h ago
Bloomberg
ECB Confronts Shifting Markets as Economy Stays Frozen: Eco Week
(Bloomberg) -- European Central Bank officials will set policy this week against a backdrop of investors betting on a global upturn even as the euro zone remains mired in pandemic lockdowns and painfully slow vaccinations.President Christine Lagarde will need to test her institution’s current stimulus plans against the challenges presented by those contrasting situations. While some of her colleagues have signaled concern over rising global bond yields, driven partly by the faster vaccine drive and bigger stimulus plans of the U.S., others are taking it in their stride for now. Investors will be watching Monday’s bond-buying data to see if the ECB ramped up purchases last week.Meanwhile the ECB will assess the damage to growth from another lost quarter, with lockdowns throughout the euro region freezing activity as health authorities’ immunization efforts struggle to gain traction compared with the U.K. and U.S. Along with the decision on Thursday, Lagarde will unveil new quarterly forecasts at a press conference.Where the Frankfurt institution can take some comfort is that it already has extensive stimulus in place. The centerpiece of that is its pandemic purchase program, whose original aim was to keep yields in check. That’s currently set to last at least another year.But sooner or later, as officials observe how a recovery takes shape, they are going to have to decide whether the support currently pledged with that tool is enough.What Bloomberg Economics Says:“The ECB has emphasized its intention to maintain favorable financing conditions in an effort to support the recovery. We anticipate a clear message from the Governing Council that higher bond yields are triggering an unwarranted tightening of conditions.”--Maeva Cousin, David Powell and Jamie Rush. For full preview, click here.Elsewhere, Canada, Serbia and Kazakhstan are among countries with interest-rate decisions, the OECD presents its latest economic forecasts, and the U.K. will release data that may show the initial impact of post-Brexit trading.Click here for what happened last week and below is our wrap of what is coming up in the global economy.U.S. and CanadaInvestors in the U.S. are watching for the latest consumer price data Wednesday as debate heats up over fears of inflation rising in pockets of the economy. Other reports due out this week include updates on the federal budget, weekly jobless claims and consumer sentiment. Federal Reserve policy makers are in blackout ahead of the central bank’s next meeting on March 16-17.President Joe Biden’s signature $1.9 trillion Covid-19 relief bill passed the Senate on Saturday, following a more than 25-hour marathon of amendment votes that was completed only after a lengthy interruption while Democrats settled an intra-party dispute over unemployment aid. The measure, the American Rescue Plan Act, now heads back to the House, where Majority Leader Steny Hoyer said a vote will be held Tuesday.Bank of Canada policy makers meeting Wednesday are likely to indicate they have no plans to withdraw stimulus from the economy any time soon, even as they prepare to adjust their quantitative easing program.For more, read Bloomberg Economics’ full Week Ahead for the U.S.Europe, Middle East, AfricaA turning point in the U.K.’s pandemic response is due on Monday, when schools in England reopen. The measure is an initial step unveiled as part of Prime Minister Boris Johnson’s plan to unlock the economy as vaccinations roll out.Britain’s other pressing economic challenge, its exit from the European Union, may feature in gross domestic product for January. That report on Friday will reveal a glimpse of the growth impact from the country’s new trading relationship with the bloc as of the start of this year, in addition to the third lockdown.The U.K.’s two most senior economic policy makers will also speak, with Bank of England Governor Andrew Bailey delivering a speech, and Chancellor of the Exchequer Rishi Sunak testifying to Parliament’s Treasury Committee about last week’s budget.In the euro region, policy makers will be bound to a quiet period before the ECB decision later in the week. German industrial production data for January on Monday will signal how the factory base there is weathering the global slump and a continuing lockdown.Elsewhere on the European continent, Serbia’s central bank will release its latest policy decision on Thursday, showing whether officials will keep the interest rate on hold at 1% for a third month after a surprise cut to that level in December.Data on Tuesday will probably show the South African economy still contracted from a year earlier in the three months through December, even as it’s expected to reflect strong quarter-on-quarter annualized expansion. Israel will move into the next stage of reopening its economy from lockdown restrictions, with restaurants and cafes that will be allowed to open for full service in the world’s most vaccinated country.For more, read Bloomberg Economics’ full Week Ahead for EMEAAsiaChinese inflation numbers on Wednesday and credit figures for February will all be closely watched after PMIs pointed to slowing momentum for the world’s No. 2 economy. Trade data on Sunday showed exports surged in the first two months of the year, reflecting strong global demand for manufactured goods, though figures were partly skewed by the low base in 2020 when the economy was in lockdown.Bank of Japan Deputy Governor Masayoshi Amamiya speaks on Monday ahead of a policy review later this month. The words of one of the principal architects of yield-curve control will be closely scrutinized for possible signaling from the central bank of what is in the pipeline.A raft of data including household spending, wages and bankruptcies will show how the Japanese economy was faring during the state of emergency, while revised GDP figures for the last quarter may show slightly slower growth after the release of weaker capital spending data last week.For more, read Bloomberg Economics’ full Week Ahead for AsiaLatin AmericaIn Chile on Monday, look for year-on-year inflation data to come in right around the 3% target, where expectations appear well-anchored, yet again.On Tuesday, Mexico’s inflation reports are the next-to-last price readings before the central bank’s March 25 meeting. The figures here may keep a quarter-point interest rate cut in play.In Brazil events have overtaken policy, with the February report out Thursday expected to show inflation bumping up against the top of target range. Economists see a strong likelihood of a half-point interest rate increase at next week’s central bank meeting while swap traders have priced that in with six more to follow by year-end.Later in the day, Argentina’s statistics agency posts consumer price data, and Peru’s central bank is expected to keep the key rate unchanged at 0.25%.The week concludes with January reports on Brazilian retail sales and Mexico’s industrial production.For more, read Bloomberg Economics’ full Week Ahead for Latin AmericaFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
2d ago
Bloomberg
OPEC+ Surprise Sends Oil Past Gulf Budget-Balancing Levels
(Bloomberg) -- Oil soared past fiscal breakeven prices for the Middle East’s four biggest producers after OPEC+ kept output largely unchanged and an attack on a highly protected Saudi Arabian oil facility.The late Sunday attack on an oil storage tank farm sent the global crude benchmark above $70 a barrel, days after the shock move by the OPEC+ cartel sparked a rally.If oil prices stay at current levels, “we would see fiscal surpluses for the larger Gulf Cooperation Council economies,” said Monica Malik, chief economist at Abu Dhabi Commercial Bank. “This provides more fiscal space to support economic activity and recovery.”Analysts at Goldman Sachs Group Inc. and JPMorgan Chase & Co. raised their Brent price forecasts after the OPEC decision.On Monday, Dubai-based lender Emirates NBD PJSC revised its average oil price upward to $67.50 per barrel this year, leading to narrower budget deficits, “assuming spending remains unchanged and governments continue to prioritize deficit reduction over boosting growth.”Budget deficits in the Arab Gulf, where economies are reliant on oil, widened after prices crashed in 2020. OPEC+ agreed last year to take about 10% of global supply off the market to stem the plunge. While the group has slowly rolled back some of those cuts, it is curtailing more than 7 million barrels of daily production.Still, Brent prices have averaged just below $60 so far this year -- below the breakeven level for most Gulf countries. Saudi Arabia, the Arab world’s largest economy and OPEC’s biggest producer, has posted successive budget shortfalls in the past seven years, a trend the International Monetary Fund predicted would continue through 2024.And the OPEC+ decision may be eroded.“Compliance with OPEC restrictions may deteriorate, resulting in a smaller decline in average crude oil production this year relative to 2020,” wrote Khatija Haque, head of research and chief economist at Emirates NBD. “OPEC+ may decide to increase production more aggressively later this year, and governments could choose to increase spending to support the economic recovery in the non-oil sectors this year.”(Updates with missile attacks on Saudi facility from first paragraph, Emirates NBD report in fifth.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
15h ago
CoinDesk
Bitcoin Retakes $50K on US Stimulus Progress; Uniswap’s UNI Cracks the Top 10
The top cryptocurrency is changing hands near $50,500 at press time, representing a 4% gain on the day.
1d ago
MoneyWise
Joe Biden's stimulus check changes: Do you still qualify for $1,400?
To win Senate passage, Biden agreed to make millions ineligible for the third checks.
1d ago
MoneyWise
The new stimulus checks: What's still ahead, before you can get your money?
And will you even get a payment this time, under the new limits the president agreed to?
11h ago

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