FTSE slips despite rising crude prices
|Rising crude prices have the potential to boost the FTSE, yet with North Korea continuing to play on the collective market mindset.
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Stocks lose ground as fears remain
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Downside risk remains dominant
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Post-Harvey recovery fuels switch in gasoline-crude dynamic
Global stock markets appear to be in a period of nervous uncertainty, as the threat of another North Korean test looms large over any investors wishing to invest in risky assets. The clear indecision evident throughout the Asian session has translated into a morning of downside for European indices, with the FTSE, DAX and CAC all trading in the red. Unfortunately with Trump focusing on the DACA scheme, it feels unlikely that we will hear any market positive announcements from leftfield, leaving the risk skewed towards the downside given the potential for another North Korea ‘gift’.
Gasoline prices have taken a turn for the worst this week, with the dynamic of higher gasoline and lower crude prices reversing as the refineries come back on grid in the wake of Harvey. While many refineries may have some lasting impact, the fact that we have seen the storm move away from the sensitive Texas region means that we will see many refineries back on track, raising demand for crude, and raising the supply of gasoline. With crude prices on the rise, there are hopes that this will help boost the commodity heavy FTSE 100 index.
Ahead of the open we expect the Dow Jones to open 29 points higher, at 21,782.
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