Yahoo Finance Stock Market Forecast – Shares are Mixed; Energy Shares Rally
US stocks were mixed on Wednesday with the Dow and S&P 500 moved lower and the Nasdaq bucking the trend. Prices moved lower in early trade following commentary from Robert Lighhizer who poured cold water on the idea that there would be a swift trade agreement between the US and China. The S&P 500 was led down by communication services and healthcare. Financials and Energy were the best performers. Energy shares were led higher by a rebounded in crude oil prices which surged following a larger than expected inventory draw reported on Wednesday by the US Department of Energy.
Lighthizer Said US is Working toward Abandoning Tariff Hikes
U.S. Trade Representative BobLighthizer said Wednesday that the administration was working towards formally abandoning plans to hike tariffs on Chinese goods from 10% to 25%. The Wall Street Journal reported that plans will be shelved as long as the two countries continue talking which would signal that a trade deal between them could be on the horizon. Originally, the U.S. planned on hiking tariffs on $200 billion worth of Chinese goods if a deal could not be reached by March 1. The Journal said Lighthizer made those remarks following his testimony to the House Ways and Means Committee.
Crude Oil Inventories Surprisingly Decline as Demand Picks Up
Energy shares were buoyed by robust gains in crude oil which jumped 2.7% on Wednesday following a surprise draw in crude oil inventories. Oil producers led the charge, followed by integrated oil companies and oil service concerns.
The Energy Information Administration reported that crude oil decreased by 8.6 million barrels from the previous week. Expectations had been for an increase of 2.5 million barrels of crude oil. Currently At. crude oil inventories are about 3% above the five year average for this time of year. Gasoline inventories decreased by 1.9 million barrels last week compared to expectations of a smaller draw. Distillate fuel inventories decreased by 0.3 million barrels last week and are about 2% below the five year average for this time of year.
Demand is on the rise. Total demand over the last month averaged 20.8 million barrels per day, up by 2.1% from the same period last year. Distillate fuel demand which includes heating oil and diesel fuel averaged 4.2 million barrels per day over the past four weeks, up by 4.5% from the same period last year. Jet fuel demand was up 2.5% compared with the same four-week period last year.
President Trump in Vietnam, Michael Cohen Testifies
While President Trump was in Vietnam negotiating with the North Korean Chairman, his former personal lawyer was testifying in front of Congress. Michael Cohen told Congress that Trump lied about the payments to porn star Stormy Daniels. He also lied about negotiating the project of building Trump Tower Moscow, because he never thought he would win the US Presidential Election and if he lost he would have made hundreds of millions of dollar on the Moscow project.
This article was originally posted on FX Empire