U.S. equity funds witnessed a surge in capital outflows in the last week on concerns that the Federal Reserve's tough stance to break persistently high inflation would drag the economy into recession. The traders offloaded $10.19 billion worth of U.S. equity funds, posting their biggest weekly net selling since June 15. Federal Reserve Board chair Jerome Powell said last week that the central bank will raise rates as high as needed, and that people should not expect the Fed to dial back its monetary policy quickly until the inflation problem is fixed. Growth funds were hit hard as weekly net selling jumped to $4.52 billion, marking the biggest withdrawal in 11 weeks, but value funds secured $724 million in net buying. For many Americans, the big question is less about the exact size of September's rate increases and more about whether those working will be able to keep their jobs - and for the U.S. economy to skirt recession - as the Fed bears down on inflation.
Trading recommendation: sell 3980 and take profit 3815.
Gazprom’s announcement this afternoon that it is once again shutting down NorthStream1 under fallacious pretenses is another confirmation of its unreliability as a supplier. Europe has been building up its storage, in an attempt to prepare for the prospect of a Russian cutoff, and has a buffer for at least part of the winter. Yet the situation could get much worse when stockpiles decrease, especially closer to the end of the heating season - or if Europe has a severe cold snap. The situation is tense and a further deterioration of the situation cannot be ruled out. Increased demand for hydrocarbons in Europe will drive up gas prices in the United States. With a favorable outcome, prices in the autumn can renew their historical maximum and rise in price by 53% from current levels.
Trading recommendation: buy 8.90 and take profit 9.90.
The Organization of Petroleum Exporting Countries and its partners are widely expected to keep production steady when they meet on Monday. Even so, Saudi Energy Minister Prince Abdulaziz bin Salman often likes to surprise observers, and OPEC+ delegates privately say that all options remain on the table. OPEC+ has a greater need to consider a widened range of scenarios at this meeting. Oil prices have rounded off their longest decline since 2020, imperiling the unprecedented windfall enjoyed by the Saudis and their partners. China, the biggest oil importer, has exhibited signs of an “alarming” economic slowdown, while the US has skirted close to recession. Meanwhile, there’s been a resumption of nuclear talks that could revive crude flows from OPEC member Iran.
Trading recommendation: range 84.50 - 88.00.