Good morning. Here's what happened overnight and what you need to know today.
1.
Crude squeeze: Oil prices fell over 2% after OPEC cut its global oil demand growth forecast for 2024 and 2025, its third consecutive downward revision, primarily due to weaker Chinese demand. The group now expects oil demand to rise by 1.93 million barrels per day (bpd) in 2024, down from its previous forecast of 2.03 million bpd. Its forecast for China, the world’s biggest importer of crude oil, was lowered from 650,000 bpd to 580,000 bpd as oil imports fell for the fifth consecutive month. Brent crude futures, the global benchmark, dropped to USD77.44 ($115.16) per barrel, while West Texas Intermediate slid to USD73.92. The weaker demand forecast was driven by China’s economic slowdown, falling oil imports and a shift towards cleaner energy. The price fall also followed weak inflation and trade data in China, which signalled sluggish domestic amid Chinese officials' talk of stimulus. (Capital Brief)
2.
Outlook clash: The Q3 earnings season in the US is underway with a big divergence between company outlooks and analyst forecasts, Bloomberg reported. Analysts predict companies in the S&P 500 will post their weakest result in the past four quarters with an aggregate increase of just 4.2% in earnings, down from an expected 7% in July. Company guidance, however, implies a 16% jump, according to the Bloomberg data. Earnings season will be a big test for the stock market’s USD9 trillion ($13 billion) rally this year, which pushed the S&P 500 to a new record intraday high on Monday. Gina Martin Adams, chief equity strategist at BI, said the dichotomy was “unusually large,” and the significantly stronger outlook suggests “companies should easily beat expectations. Margins should keep marching higher as companies emphasize efficiency amid economic uncertainty,” she wrote in a note. (Capital Brief)
