Home Business Wall Street turns positive after Trump’s oil tweet

Wall Street turns positive after Trump’s oil tweet

by drbyos
Statue “The fearless girl” in front of the New York Stock Exchange

The US stock market gains after a weak start.

(Photo: AFP)

new York The hope of a quick end to the oil price war between Saudi Arabia and Russia has sparked a price explosion of crude oil and lured investors back to Wall Street. They pushed aside the disastrous US job market data on Thursday

The US leading index Dow Jones gained 2.2 percent to 21,413 points. The technology-heavy Nasdaq advanced 1.7 percent to 7487 points and the broad S&P 500 gained 2.3 percent to 2527 points. Dax and EuroStoxx50 had previously closed slightly at 9571 and 2681 points.

US President Donald Trump said he mediated between Saudi Arabia and Russia. Now “expect and hope” that the two parties to the conflict will reduce their oil production by ten or even 15 million barrels a day, Trump said on Twitter. The US crude oil grade WTI then temporarily rose by 35 percent, the largest profit in its history. Brent temporarily jumped 47 percent, also a record.

Later, oil prices declined due to skepticism in the market whether Russia and Saudi Arabia could actually agree on such a large reduction. Saudi Arabia alone is currently pumping a record twelve million barrels a day. In early March, the price war was triggered by Russia’s refusal to further cut production due to the coronavirus crisis.

This helped the stocks of the oil companies Exxon and Chevron at course gains of more than eleven percent. The papers from shale oil producers such as Marathon, Occidental or Apache even saw price jumps of around 19 percent. These companies suffer particularly badly from the low oil price because, according to experts, they only work profitably from a price of around $ 50 due to the complex fracking process. With Whiting, the first major shale oil producer had to apply for creditor protection.

No end to the wave of layoffs in sight

Due to restrictions to curb the coronavirus pandemic, initial jobless claims rose to 6.6 million last week. That is twice as high as the previous record from the previous week. Analysts had expected 3.5 million initial applications. “I fear that the unemployment rate will not go down as quickly because many companies will go bankrupt,” said Priya Misra, chief investment strategist at investment bank TD Securities. Economist James McCann of the wealth manager Aberdeen Standard forecast a US unemployment rate of more than ten percent in the coming months.

Zoom loses 11 percent

Zoom’s stocks fell 11 percent against the trend. The provider of video conferences was able to increase its user numbers significantly due to the virus crisis. SpaceX, the rocket company of the Tesla-Chefs Elon Musk, however, prohibits his employees from using the software. The reason is “considerable data protection and security concerns”. The US space agency NASA, one of the largest SpaceX customers, has also banished Zoom from its computers.

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