Week ahead: Saudi oil production attack will boost markets

Saturday's attack on Saudi oil facilities reshuffles market expectations for next week

All US indexes recorded a third weekly gain on Friday close

Treasury yields climb for eighth day to six-week high

US economic statistics improved, global monetary policy eased and hopes for a trade resolution seemed more likely, a critical facility on a Saudi Aramco treatment facility said Saturday, and second largest oil field in flames, stopping production in these places.

What should have been a quiet week, as equities stagnated at record highs ahead of Wednesday's central bank rally, is expected to become a wild ride with markets – and governments – on the alert for a possible future. military escalation in the Middle East.

New tone for next week's markets

US Secretary of State Mike Pompeo has accused Iran of the attack on "global energy supplies", led by Houthi rebels based in Yemen, allies of Iran. The strike damaged half of the desert kingdom's production, which accounts for 5% of the world's oil supply.

Pompeo accused Iran of pretending to "engage in diplomacy" while calling for "de-escalation". In a tweet, he said that Iran would be "held responsible for its aggression".

The events of this weekend have given a new tone to the markets next week, even after the four US indexes – the, and – have climbed for a third straight week. Expect extreme results in a marked sector rotation.

In addition, commodity trade is likely to see a jump in tomorrow, up to $ 10, while other sectors at risk could collapse.

Even if the price of oil opens up to 10 dollars higher, it will remain lower than the April peak at 66.60 dollars, whose peak must be overcome to establish a bullish trend in the medium term.

The S & P 500 fell on Friday (-0.07%), followed by laggards (-1.2%). at the top of the green sectors (+ 1.13%).

also won (+ 0.83%). Global banks, including JPMorgan Chase (NYSE 🙂 (+ 1.97% Friday, + 6.77% for the week), allowed the Treasury to jump to record levels of its shares. The stock has completed a health and safety continuation plan, suggesting further gains to come.

The sector (-0.72%) however fell under the pressure of Apple (NASDAQ :), (-1.94%) and Broadcom (NASDAQ :), (-3.41%), after Thursday , during its third quarter of 2019, demand remains weak.

The SPX grew 0.96% on a weekly basis, with 8 of the 11 sectors in the green, led by financial services (+ 3.83%), (+ 3.47%) and materials (+ 3, 32%). 10-year US Treasury note yields rose for an eighth day and ended the week at a six-week high. Technically, rates have crossed over the downtrend line since May 3rd and are now targeting the downtrend line since November 7th.

The pair ended down Friday, for the first time in five days, for the second time in nine days, after failing to beat the 100 DMA, to close atop a chain in free fall.

recorded the largest weekly gain against the dollar since May, as well as its longest weekly gains since 2016 compared to, after the Times announced possible breakthroughs in the Brexit negotiations on the Irish backstop litigation. Prime Minister Boris Johnson will meet with EU President Jean-Claude Juncker next week.

Technically, the group completed a series of troughs and decreasing levels, setting a downward trend, while the 200 DMA provided support on Friday.

fell to less than 0.1% of its lowest level since August 6th. Technically, he has found support at the bottom of a rising channel since the end of May, while both the RSI and the MACD have provided sales signals.

Week ahead

All times are EDT

Sunday

22:00: China – : The previous reading was 5.8%. Investors will seek to gauge the changing narratives of the global economy in the context of the US-China trade war.

On Monday

9:30 pm: Australia – Market participants will examine the wording to determine the possible quantitative easing path of the central bank after not having clearly defined the threshold.

Tuesday

17:00: Germany – : should rebound to -38.0 from -44.1.

Wednesday

4.30 pm: United Kingdom – : down 2.1% yoy, from 1.9% to 1.9%, and from 0.0% to 0.5% in August.

17:00: Euro zone – : likely to have remained stable at 1.0% yoy in August while going from -0.5% to 0.2%.

8:30 am: United States – : probably slipped to 1.300M of 1.317M.

8:30 am: Canada – : was 0.3% at the previous reading.

10:30 am: United States – : Previous reading was -6.912 M barrels.

14:00: United States – investors are expecting the Fed to reduce its target rate range by 25 basis points this week.

Thursday

8:30 am: United States – : should dive to 11.0 from 16.8.

Friday

8:30 am: Canada – : down from 0.9% to 0.4% for the month of July.