Oil prices fall as China faces Covid concerns, Goldman Sachs predicts cuts
Oil prices fell nearly a dollar as Covid worries mounted in China and the nation took notice first virus-related deaths recorded since May this year.
Brent Crude Oil Futures lost less than a dollar, or 0.9%, to $86.83 a barrel and US West Texas Intermediate Futures fell 1.09% to $79.21 a barrel.
Goldman Sachs lowered its forecast for Brent oil for the fourth quarter of 2022 by $10 to $100 a barrel, citing subdued demand from China amid rising Covid-19 concerns and insufficient detail from the recent Group of 7 price cap Nations for Russian Oil.
“We believe the market has a right to be concerned about fundamentals,” economists led by Jeffrey Currie said in the note, adding that the potential for more lockdowns in China is in line with the recent one Production cuts by OPEC+.
— Lee Ying Shan
CNBC Pro: Strategist says Chinese tech stocks like Alibaba are ‘grossly undervalued’
This year’s 30% drop in the value of Chinese big tech stocks such as Alibabamade them “incredibly cheap,” according to investment bank China Renaissance.
Equities chief Andrew Maynard believes not only does the stock market appear to have bottomed out, but investors could miss out on a rally by remaining underweight China.
“Without a shadow of a doubt, being underweight China will cost you going forward,” Maynard said.
— Ganesha Rao
Markets are watching for more hints of Fed hikes and the economy in the coming week
Investors may be a little more cautious in the coming week as stocks seek direction in quiet trading and bond market warnings of a recession grow louder.
The Thanksgiving holiday on Thursday should mean markets are likely to be quiet on Wednesday and Friday. Merchants will monitor reports of Black Friday holiday shopping for consumer feedback.
“It’s truly a week where data dependency is the keyword,” said Julian Emanuel, Senior Managing Director at Evercore ISI. “The bias [for stocks] is higher unless the data continues to deteriorate and the Fed maintains its hawkish stance…which has clearly intensified over the past 48 hours.
Check out our full deep dive of what to expect in the coming week here.
— Patti Domm, Tanaya Macheel
CNBC Pro: Morgan Stanley’s Mike Wilson predicts S&P 500 bottom, calling it an ‘excellent buying opportunity’
Mike Wilson, Morgan Stanley’s Chief US Equity Strategist, says we are in the “final stages” of the bear market, but the situation will remain challenging for a while.
It predicts when — and at what level — the S&P 500 will hit a “new low.”
— Wheat Tan
European Markets: Here are the opening calls
European markets are expected to open lower on Monday as investors continue to monitor the uncertain economic outlook.
According to data from IG, the UK FTSE index is expected to open 15 points lower at 7,386, Germany’s DAX down 54 points at 14,378, France’s CAC down 17 points at 6,629 and Italy’s FTSE MIB down 54 points at 24,445.
There are no major wins on Monday. Data releases include German producer prices for October.
— Holly Ellyatt