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Thursday, April 18, 2024

Today’s headlines

What’s happening: Crude oil prices fell sharply on Wednesday, recording losses for a third consecutive session.

What happened: Oil prices fell sharply during Wednesday’s session after the US announced a higher-than-expected rise in crude inventories.

The demand side also did not support crude oil, with weak economic data coming out of China.

Why it matters: Data released by the US government on Wednesday showed commercial crude inventories rising for the fourth week in a row.

The EIA (Energy Information Administration) said commercial crude inventories rose by 2.7 million barrels to 460 million barrels in the week ended April 12. The figure was much higher than market expectations of a gain of 1.6 million barrels. Late Tuesday, the API (American Petroleum Institute) had announced an increase in crude stockpiles of 4.1 million barrels last week.

The EIA said weekly gasoline stockpiles had contracted by 1.2 million barrels, while distillate stockpiles had declined 2.8 million barrels in the week. US oil production came in unchanged at 13.1 million barrels per day.

As per the latest batch of economic data released by China, its economy expanded by meagre 5.3% in the first quarter, while industrial production grew by a lower-than-expected rate of 4.5% in March. Retail sales, which had grown by 3.1% year-over-year in March, also missed market estimates. Fitch recently slashed its outlook on the country’s sovereign credit rating to negative.

Some weakness in the US dollar limited the overall losses for crude oil on Wednesday. A decline in the greenback makes commodities like oil cheaper for foreign currency holders. The US dollar index, which measures the greenback’s performance versus a basket of major peers, lost around 0.3% to 105.95.

WTI crude for May delivery fell by $2.67 to close at $82.69 per barrel on Wednesday, declining for the third straight session. June Brent crude, the international benchmark, lost $2.73 to settle at $87.29 per barrel.

In other energy trading, May gasoline fell 9 cents to $2.73 a gallon, while May heating oil dipped 8 cents $2.57 a gallon and Natural gas for May delivery declined 2 cents to $1.71 per million British thermal units.

What to watch: Investors await the release of data on natural gas stockpiles from the EIA today. US natural gas supplied had increased by 24 billion cubic feet in the week ended April 5, versus market estimates of a gain of 14 billion cubic feet.

Rising geopolitical concerns will also remain one of the major concerns for investors.

The markets today

Shares of Abbott Laboratories will be in focus today following the release of its first-quarter results

Context: Shares of Abbott Laboratories fell on Wednesday despite the company reporting stronger-than-expected quarterly results.

Details: The performance of Abbott’s medical device business recovered during the quarter, due to a rebound in demand, with people having delayed their medical procedures during the pandemic.

Its medical device sales rose to $4.45 billion in the first quarter, topping market views of $4.30 billion. Sales of FreeStyle Libre, the company’s biggest product, came in at $1.5 billion.

Abbott said the quarterly sales of its base business surged 10.8% on an organic basis to $9.96 billion in the first quarter, topping the consensus estimates of $9.88 billion. Adjusted earnings came in at 98 cents per share, exceeding Wall Street expectations of 95 cents per share.

“This was the fifth consecutive quarter that we delivered double-digit organic sales growth in our underlying base business, which included particularly strong results in Medical Devices and Established Pharmaceuticals,” CEO Robert Ford said during the earnings call.

Management raised their adjusted earnings forecast for fiscal year 2024 from $4.50-$4.70 per share to $4.55-$4.70 per share. They projected second-quarter adjusted earnings of $1.08 to $1.12 per share.

How shares responded: Shares of Abbott Laboratories fell 3% to close at $105.90 on Wednesday, mostly on profit taking. The stock has added around 11% over the past six months.

What to watch: Investors will continue monitoring demand for medical devices, which is expected to provide a further boost to the company’s overall results ahead.

Other Markets: European indices closed higher on Wednesday, with the FTSE 100, DAX 40, CAC 40 and STOXX Europe 600 Index up by 0.35%, 0.02%, 0.62% and 0.06%, respectively.

The news shaping the markets

US House Speaker Mike Johnson said the House would vote on an aid package worth $60 billion for Ukraine on Saturday. The news sent the safe-haven US dollar index slightly lower in forex trading this morning.


Australia’s unemployment rate rose to 3.8% in March, from 3.7% in February. However, the latest reading coming lower than market expectations of 3.9% lent support to the AUD/USD forex pair.


Russia’s producer inflation eased to 19.1% in March, from 19.5% in February, which sent the RUB/USD pair higher in forex trading this morning.


Brazil’s IBC-Br Index of Economic Activity rose by 0.40% in February, compared to a 0.52% gain a month ago, which lent support to the BRL/USD forex pair.


South Africa’s retail trade contracted by 0.8% year-over-year in February. This being lower than the 2% decline recorded in the prior month sent the ZAR/USD pair higher in forex trading this morning.

What else to watch today

Eurozone’s current account, construction output, European Union new passenger car registrations and European Council meeting, Italy’s current account, South Africa’s value for building plans passed, Turkey’s gross foreign exchange reserves, US initial jobless claims, Philadelphia Fed manufacturing index, continuing jobless claims and existing-home sales, India’s total passenger vehicles sales and M3 money supply, China’s foreign direct investment, as well as Argentina’s balance of trade.


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