Oil Prices Back Below $70 Despite OPEC Rumors

Posted on September 4, 2024September 4, 2024 by Skerdian Meta

Today crude Oil fell below $70 as political tensions in Libya head toward a resolution but jumped $2 on OPEC rumors, which have been erased now. Early in the Asian session, oil prices dropped below $70, extending Tuesday’s significant decline, with the market responding to expectations that the political conflict halting Libyan oil exports may soon be resolved, potentially increasing supply. In the European session we saw a bounce on rumors that OPEC+ might postpone the supply hike, sending WTI $2 higher, but oil is back below $70 now.

Continue reading “Oil Prices Back Below $70 Despite OPEC Rumors” →

Oil Prices Drop Over $1 Per Barrel Amid Demand Concerns

Posted on September 4, 2024 by Ignacio Teson

During the session, both benchmarks fluctuated between $1 down and $1 up following news that OPEC+ was discussing delaying a potential production increase due to expected rising output in Libya.

Oil prices fell more than $1 per barrel on Wednesday in a volatile session, as traders grew concerned about demand in the coming months amid mixed signals from producers about increasing supply.

Brent crude futures closed down $1.05, or 1.42%, at $72.70 per barrel. U.S. West Texas Intermediate (WTI) crude futures lost $1.14, or 1.62%, to settle at $69.20 per barrel.

During the session, both benchmarks swung between $1 losses and $1 gains following reports that OPEC+ was considering postponing a planned production increase due to anticipated higher output from Libya.

In a broader selloff, Brent futures have dropped 11%, or about $9, in just over a week, hitting a low of $72.63 on Wednesday.

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Weak economic data from the United States and China heightened ongoing expectations of a global economic slowdown and weaker oil demand, contributing to a broader decline in global markets.

Meanwhile, traders believe the conflict that has halted Libya’s oil exports could soon be resolved, leading to an increase in crude supply.

This selloff shifted attention to what OPEC+’s response would be, as the group seemed poised last week to begin planned production increases in October. The latest data has fueled concerns about weaker-than-expected demand in China, the world’s largest crude importer, and the impact on U.S. consumption.

Elon Musk’s Concedes to Judge De Moraes and Agrees to Block X in Brazil

Posted on September 4, 2024 by Ignacio Teson

The billionaire has partially stepped back from his campaign following the freezing of the finances of a satellite internet group due to fines imposed on a social media site.

Elon Musk’s satellite internet provider, Starlink, has reversed its stance and agreed to block access to his social media site X in Brazil, marking a partial retreat in the dispute between the billionaire and the Supreme Court of Latin America’s largest nation.

Starlink, a crucial tool for tens of thousands of Brazilians in remote areas like the Amazon rainforest, had previously stated it would not comply with a national ban on X, which is owned by Musk, calling the order from Supreme Court Justice Alexandre de Moraes “illegal.”

Last Friday, De Moraes ordered regulators to block access to the social media platform in Brazil after X failed to meet a deadline to appoint a legal representative in the country, a requirement under the country’s civil code.

Musk had earlier closed X’s office in Brazil amid an escalating dispute with De Moraes over court requests to remove accounts allegedly linked to far-right individuals and groups.

In a controversial move, the judge also froze Starlink’s bank accounts in Brazil last week, accusing it of being part of a “de facto economic unit” with X.

Starlink is a wholly-owned subsidiary of SpaceX, in which Musk holds about 40% of the shares but controls 79% of the voting rights.

The court stated that the decision to freeze Starlink’s accounts was an attempt to collect fines imposed on X for not complying with court orders.

After initially refusing to block access to X, Starlink faced the possibility of losing its license to operate in Brazil. The head of the telecommunications regulator Anatel, said that Starlink could lose its license if it was confirmed that it did not comply with De Moraes’ orders.

However, on Tuesday night, the satellite internet provider chose not to continue the confrontation.

“Following last week’s order from (De Moraes) that froze Starlink’s finances and prevented it from conducting financial transactions in Brazil, we immediately initiated legal proceedings in Brazil’s Supreme Court, explaining the severe illegality of this order and requesting the court to unfreeze our assets,” Starlink posted on X.

“Regardless of the illegal treatment of Starlink in the freezing of our assets, we are complying with the order to block access to X in Brazil,” the company stated.

With over 225,000 users in Brazil, Starlink is not among the country’s largest internet operators but is considered a vital tool for communities in remote areas such as the Amazon and the nation’s agricultural heartland.

Economic Activity in the U.S. is Stagnant and Declining, According to the Fed’s Beige Book

Posted on September 4, 2024 by Ignacio Teson

In recent weeks, the number of districts where economic activity remained stable or declined increased to nine, up from five in the previous period, while activity grew in three districts.

The Federal Reserve’s Beige Book, released this Wednesday, highlighted a deterioration in economic activity across the United States, with more regions experiencing a slowdown in growth, while the labor market remained “stable.”

“Economic activity grew slightly in three districts, while the number of districts reporting stable or declining activity increased from five in the previous period to nine in the current period,” the report states.

Meanwhile, “employment levels remained generally stable, though there were isolated reports of businesses filling only essential positions, reducing hours and shifts, or cutting overall employment levels due to attrition.”

“Overall, wage growth was modest, while increases in non-labor input costs and selling prices ranged from slight to moderate. Consumer spending declined in most districts and generally remained stable throughout the period,” the report details.

Employers became “more selective in their hiring and less inclined to expand their workforce, citing concerns about demand and an uncertain economic outlook.”

“As a result, job candidates faced increasing difficulties and longer timelines to secure positions. As competition for workers eased and employee turnover decreased, businesses felt less pressure to raise wages and salaries,” it notes.

On the inflation front, “prices increased modestly during the period,” while “increases in non-labor input costs were largely described as modest to moderate.”

“Looking ahead, contacts generally expected price and cost pressures to stabilize or decrease further in the coming months,” the report concludes.

U.S. Steel Threatens to Shut Down Several U.S. Plants If Acquisition by Nippon Steel Fails

Posted on September 4, 2024 by Ignacio Teson

The American steel manufacturer U.S. Steel threatened on Wednesday to shut down several production sites if its acquisition by its Japanese rival, Nippon Steel, fails—a deal opposed by the government and presidential candidates.

In a statement, U.S. Steel warned that if the Japanese firm does not take control, it would abandon major modernization investments at its Mon Valley Works (Pennsylvania) and Gary Works (Indiana) facilities.

Pennsylvania is one of the key states for the upcoming U.S. presidential election on November 5.

Both Vice President Kamala Harris and former President (2017-2021) and Republican candidate Donald Trump have expressed opposition to the sale during their campaigns.

U.S. Steel has scheduled an event this Wednesday to rally support from its team for the sale to the Japanese giant.

“We want elected officials and other key decision-makers to recognize the benefits of the deal, as well as the inevitable consequences if the agreement fails,” explained the president of the American group, David Burritt.

In December, U.S. Steel reached a $14.9 billion sale agreement with Japan’s Nippon Steel, which in turn promised investments to keep the Pennsylvania plants competitive.

However, the transaction, which has been denounced by the powerful United Steelworkers (USW) union, is facing political hurdles as many Republicans and Democrats oppose it.

On Monday, during a Labor Day event in Pittsburgh, Harris stated that U.S. Steel “must remain in American hands and operated by Americans.”

Could September Be Bitcoin’s Toughest Month?

Posted on September 4, 2024 by Timothy St. John

September is off to a rough start for Bitcoin, with the coin at $58,313 and struggling to get above the crucial $60K level.

Bitcoin is really struggling in September so far.

In fact, Bitcoin has spent no time at $60K or above since the month started, which aligns well with assessments that September is historically a very difficult month for the crypto coin and will likely be similarly tough again this year.

Bitcoin started off 2024 at $44K, so it has come a long way, but ever since it hit a new record high early on, the coin has had a tough time trying to reach back to those early 2024 heights. Investors have continued to lose faith in the coin as it has failed to hit one predicted milestone after another.

Investors should not expect Bitcoin to reach $100,000 this year, nor should they expect it to set a new record high anytime soon. Bitcoin investors will have to play the long game with this coin, especially now as it begins an arduous journey through September.

The September Battle

As the month started off, many industry insiders were quick to point out that Bitcoin has historically had a tough September, and the stock markets also struggle during this month. It is a time when many consumers tighten their belts, knowing that the holidays are coming soon and they will be spending a lot more money then.

While many investors hope that federal interest rate cuts will help boost Bitcoin, some analysts think it will cause the Bitcoin price to plummet. September is already a volatile time for the crypto token, and the internet rate cuts could undermine the value of cryptocurrency, leading Bitcoin to fall to $50K or below.

Some estimates put Bitcoin’s September low at around $40K, which would seriously undermine its value for the remainder of the year. There are few positive factors that look promising for the coming weeks that have the potential to lift Bitcoin well past $60K or to keep it from falling far this month.

Missing the TP in Gold, USDCHF After Weak US Employment Data

Posted on September 4, 2024 by Skerdian Meta

Gold and the CHF have been bearish for about a week, as USD buyers returned, but today the USD dipped lower after the soft JOLTS job openings numbers for July, which showed that the weakening trend continues for the US labour market. We were short on Gold and the CHF since yesterday, making some nice profit and today’s traders were going in the right direction, but they missed the take profit (TP) targets by just a couple of mere pips, when the reversal took place. Continue reading “Missing the TP in Gold, USDCHF After Weak US Employment Data” →

JOLTS Jobs Resume Slowdown – USD Lower As Vacancies Fall

Posted on September 4, 2024 by Skerdian Meta

The U.S. dollar tumbled lower as job opportunities continued their downward trend, signaling further deterioration in the U.S. labor market. JOLTS job openings fell to their lowest level since early 2021 in July, highlighting increasing challenges in the labor market. The Federal Reserve, which had previously focused on controlling inflation, has now turned its attention to the weakening employment landscape, with Fed Chair Jerome Powell emphasizing at the Jackson Hole Symposium that the central bank does not want to see additional softness in the job market, yet the latest data suggests that labor supply is shrinking.

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Spanish Prime Minister Pedro Sánchez Vows to Raise Taxes on the Wealthy

Posted on September 4, 2024 by Ignacio Teson

Spanish Prime Minister Pedro Sánchez affirmed on Wednesday that he will “work towards the approval of a State Budget that bears the hallmark of the progressive government” and that will include a more progressive tax system where “those who have more will pay more.”

Pedro Sánchez officially launched the new political and economic term, which is expected to be one of the most challenging and uncertain in recent years. He made his remarks at the Instituto Cervantes in front of around 150 social representatives from various sectors, supported by the senior members of his government—with a notable exception. First Vice President and Minister of Finance María Jesús Montero was absent as she was addressing the Senate in an urgent session “to report on the fiscal secessionism agreed with their partners bilaterally and outside the common system of financing for autonomous communities,” according to the agenda of the Upper House.

In his speech, which was consistently peppered with criticism of the opposition, particularly targeting Madrid’s low-tax model, Sánchez stated, “We will work for the approval of a State Budget that carries the mark and stamp of this progressive government.” He hinted that the budget, whose parliamentary majority for approval is currently uncertain, will deepen the focus on “a more progressive tax system where those with the most will pay more.” Sánchez emphasized, “We will limit the benefits certain elites enjoy, and we will tax those who have enough money in the bank to live 100 lives,” signaling a clear fiscal offensive against high-net-worth individuals.

Tokyo Stock Exchange Falls 4.2%, Weighed Down by Wall Street and Yen Strength Against the Dollar

Posted on September 4, 2024 by Ignacio Teson

Tokyo’s Nikkei index closed sharply lower on Wednesday, dropping 4.24%, weighed down by Wall Street’s decline and the yen’s appreciation against the dollar.

The benchmark Nikkei 225 index fell 4.24% to 37,047.61 points, while the broader Topix index ended down 3.65% at 2,633.49 points.

The dollar was trading at 145.16 yen in Asian markets on Wednesday, down from 145.87 yen on Tuesday in New York.

Major U.S. indices were in negative territory before the Asian markets opened, with the Nasdaq dropping more than 3%.

On Tuesday, the so-called “Magnificent Seven,” which have led this year’s rally, plummeted, led by Nvidia (-9.53%), Alphabet, Google’s parent company (-3.94%), Apple (-2.72%), and Microsoft (-1.85%).

In August, indices posted positive results as expectations for a September rate cut strengthened and renewed recession fears seemed to fade. However, September has started on a weak note.

This month’s Federal Reserve meeting will be closely watched following recent comments by Chairman Jerome Powell, who has supported the easing of monetary policy.

The likelihood of a 25 basis point interest rate cut stands at 63%, according to CME Group’s FedWatch tool, while the probability of a 50 basis point cut is 37%.

Tesla dropped by 1.64% after the electric vehicle manufacturer announced plans to produce a six-seat variant of its Model Y in China starting in late 2025.