Fed decision aided stock markets as spending to reduce by $15 billion
BoE move to boost consumer stocks
Oil prices fall after OPEC+ meeting
Investors across the market have had much to cheer for over the week, appetite buoyed by impressive earnings results and an optimistic view for the fourth quarter. The US Federal Reserve’s decision to taper spending and OPEC nation’s resolve on oil production have all been key events for the week ending 5 November.
Fed trims bond purchases, Bank of England delays interest rates hike
A highly anticipated US Federal Reserve meeting this week ended with the market in an upbeat mood. This is after policymakers resolved to trim expenditure on bonds by $15 billion, highlighting potential economic recovery.
Fed’s decision to cut on Covid-19 pandemic-era spending is seen as a positive signal on Wall Street and is likely to add to investor confidence. But while the Fed looks to end its quantitative easing program in June 2022, investors are likely to be wary of potential impact from negative job market data.
Meanwhile, the Bank of England gave an unexpected push for the market by deciding to hold off interest rate hikes. On Thursday, BoE’s Monetary Policy Committee voted 7-2 to hold the interest rate 0.1%, while the majority also voted to maintain the UK's bond-buying program.
Kunal Sawhney, the CEO of Kalkine Media told Reuters that the UK central bank’s move could be the cue investors need to push consumer stocks higher.
Stock markets outlook
The global stock markets remained near record highs on Thursday, with the S&P 500 closing +0.14%, the Nasdaq Composite +0.41%, and the Dow Jones Industrial Average saw a minor 0.3% retreat.
UK’s FTSE 100 is up by 0.4% on Friday, with gains buoyed by a surge in the price of AstraZeneca (AZN.L) and GlaxoSmithKline (GSK.L
The pan-European STOXX 600 has edged 0.05% higher after posting seven straight greens, while France’s CAC 40 index is up 0.4%.
Oil price reverse
Oil prices have turned lower after reports of increased supply from Saudi Arabia. The sector is also showing signs of reversal after the OPEC meeting.
Brent crude rose to highs of $84.49 per barrel on Thursday while West Texas Intermediate crude touched $83.42. However, Brent crude has slipped to $80.79 as of writing, while WTI has broken below the $80 mark to trade around $79.60.
Oil has not seen increased buying during the Asian market even as the correction looks to continue alongside a slowdown for coal and natural gas.