How do they see global markets in the Trump times?The world adjusts to the new president of the United States. The global markets expect oil recovering, USD strengthening and volatility of the Wall Street assets. The powerful finance magnates, George Soros and Warren Buffett, forecast the slumping market and the period of market stability respectively. The Soros’s pessimism reflects the uncertainty of stock traders anticipating the earnings season for the last quarter in 2016 and the forthcoming restructuring of the taxation of U.S. corporations oversea branches. Meanwhile, Buffett prefers to express optimism and trust in the new president’s common sense and business intuition, as well as the approach to his new team selection.
What was going on in the markets in the anticipation of the inauguration?However, at the moment USD is falling under pressure of the Donald Trump’s intention to halt offshore business, that raising concerns of a trade war with manufacturing exporters, on one hand. On the other hand, the main Wall Street indices rose up and CEOs of the S&P 500 companies hope the corporates profit will be boost thanks to the new tax policy. It looks like to be optimistic matches the trend.Even oil markets are celebrating the inauguration. Republicans are pushing to start oil exploration in the Arctic National Wildlife Refuge. The ANWR holds, according to the government estimation, approximately 12 billion barrels of crude, but specialists insist on investigating the market trends before the oil field exploration and elaboration. If the Exxon Mobil Corporation and other giants would show interest to work out the oil field in the period of cheap oil, the exploration will worth the efforts.
How does oil react to the news?Meanwhile, oil prices reacted to the positive GDP dynamics in China; the gross domestic product grew 6.8% in the fourth quarter of the 2016, slightly beating analysts’ expectations of 6.7% growth for the year. So Beijing will continue to consume oil, supporting the demand on the markets. Besides Chines GDP, the recent OPEC report inspires the optimism. WTI futures changed hands at $53.19 per barrel, futures for Brent – at $55.45. The Saudis expect the 2% reduction of the global supply this year, according to the November-2016 deal. Saudi Energy Minister Khalid al Falih said a shale oil production does not surge and will not soon, so the reduction will impact the growth of prices. OPEC leaders consider the demand for OPEC oil in 2017 will reach 32.10 million barrels per day, therefore the daily surplus equals 985,000 barrels with the current output. A month before the output exceeded the demand by 1.25 million barrels. Good job, the oil exporters! The contradiction between OPEC’s confidence in the shale oil sluggishness and the republicans’ intention to awake the new oil field promises the intrigue and volatility on the market. Even the ANWR will remain a sleeping beauty, the Washington new team will seize the opportunity to fight with the OPEC for the market and to add luster to the USA as a great oil exporter.
To part with dreams and illusions The time to be or not to be Donald Trump’s fan has passed, the moment to get started working according to the new terms and conditions is coming. Warren Buffett already did. Here we go!