Wednesday: GBP goes down, Google announces new mobile device, and some good news for oil traders
U.S. Oil futures and stock prices started to rise after the fall
Before the Wednesday opening, indicators of the crude futures on NYMEX quoted down 0.03%. On the other hand, API reported a heavy drop of the crude stocks of American companies last week. Analysts designated the expected draw amount as 1.5 million barrels, yet result reported by the American Petroleum Institute outcome of 7.6 million barrels. In Asia, crude prices made their rise because of the U.S. crude stocks big drop.
The U.S. oil futures made their position low on Tuesday, as a result of dollar strengthening. According to ICE Futures Exchange, November contract price for the Brent slid 0.39%. Organization of the Petroleum Exporting Countries reported last week that it would cut barrel per day output to 32.5-33 million bpd from 33.5 million bpd and this report made traders optimistic in general.
The early Wednesday trading started with oil prices rise as a result of the mentioned API report. WTI crude futures price was by 1.1 percent higher from their last settlement, and international oil markets show approximately 1 percent rise in Brent price. NYMEX indicated the crude futures for November delivery rising by 1.19 percent (to $49.27 a barrel) and Brent November contract had its gain by 1.06 percent (to $51.41 a barrel) on ICE Futures Exchange in London.
Market analysts predict crude price rising, making the WTI futures price grow from $49.22 per barrel to over $50 per barrel. The prognosis can be confirmed or rejected by the upcoming U.S. Energy Information Administration report.
GBP index made the U.S. investor nervous
U.S. stock prices on Tuesday dropped and second Wall Street session in a row resulted in losses for the investors. As a result of Brexit, GBP fell to the lowest level during three last decades, and that makes U.S. stock prices surge.
Traders predict a Fed raising in December and priced on it a 63 percent chance. On the other hand, International Monetary Fund lowered its growth forecast for 2016 on U.S. economy and dropped the indicator from 2.2 to 1.6 percent. The majority of S&P indexes fell, including S&P 500 Utilities (-2.17 percent) and S&P Telecom Services (-1.67 percent). Dow Jones and Nasdaq Composite indices also dropped: 0.47 percent and 0.21 percent respectfully.
Commenting the situation on GBP fall, British Prime Minister Theresa May said that currency goes up and down – in her words, the fundamental elements of the British economy are strong, and growth rates are to be more positive than in recent analysts’ forecasts.
Stable dollar index characterizes the basket of currencies on Wednesday. Its high position for a two-month period is a result of the U.S. Federal Reserve and U.S. Treasury officials’ speeches. US dollar index rating remained at 95.989 (highest since August).
Also, euro index also rose up, following the European Central Bank report on changes. ECB monetary policy changing made it rise to $1.1222 (+0.2 percent).
However, the current pound rating is three-decades lowest, among the others.
Mobile device market: news and new contracts
According to South Korea media sources, Samsung Electronics company (KS:005930) will gain a sole contract on the production of next-generation Qualcomm Snapdragon chips (property of Qualcomm Inc. (O: QCOM). As a part of the contract, the manufacturer will use Qualcomm’s Snapdragon 830 mobile in a Galaxy S as a part of the smartphone planned update in 2017. Some analysts said that the approximate price of such a deal is more than $1 billion.
New Pixel smartphone was announced by Alphabet Inc’s (NASDAQ: GOOGL) Google on Tuesday as a main competitor for the consumers against Apple (NASDAQ: AAPL) Inc’s iPhone. The company also announced a consumers suit for the product, designating it for home use. In addition to $649 smartphone, the company announced VR-headset, new Wi-Fi router, and a smart speaker. This announcement describes the intentions of Google to compete not only with Apple but with other manufacturers of smartphones for home-oriented sets of products.
According to Google announcement, the new Pixel will work exclusively with a single partner on the territory of U.S. – Verizon Communication Inc. (NYSE: VZ). Mentioned agreement is almost the same to the agreement between Apple and AT&T (NYSE: T)
The stated announcement made the shares of Alphabet rise 0.3 percent and resulted in slight Verizon fell by 1.2 percent.
Analysts say that the Android free-licensing makes the Google strategy dominating almost 90 percent of the global market of the mobile operating systems (according to IDC). However, the Apple Corporation remains the leading player in the high-end hardware market, and the decision of introducing its hardware to the market will make the relations between Google and Android licensees even more complicated as they are now.