Another day another oil price rout that sent energy stocks tumbling which for the third straight session brought US indices down with them. Oil prices are falling again ahead of the open of US markets on Wednesday but a massive drop in copper is the bigger concern reflecting a downgrade to its global growth forecast by the World Bank.
The World Bank downgrade and collapsing industrial metal prices such as copper just act to confirm global growth fears that plagued markets in 2014 and are continuing to do so in the New Year. Declining oil and copper prices reflect in part oversupply but also slower demand particularly from the likes of China, the world’s biggest buyer of commodities.
Oil and Copper not only have their own particular supply/demand issues but are being pressured by a rallying US dollar in which they are denominated. The US dollar index is currently sitting at nine-year highs.
Industrial titan Caterpillar Inc (NYSE:CAT) could feel the brunt of the World Bank downgrade following recent broker downgrades that sent shares crashing. Caterpillar has direct exposure to oil, gas and mining as well as emerging markets; all areas that are under pressure from slowing economic growth outside of the US.
GoPro Inc (NASDAQ:GPRO) shares got dumped en masse on Tuesday after Apple (NASDAQ:AAPL) announced it was granted a patent for an action camera similar in design to GoPro’s. The big concern since its listing in June was that GoPro is a one-trick pony liable to competition from bigger players in the consumer electronics space. The announcement from Apple is exactly what short-sellers who hold 60% of GoPro’s float had been waiting for.
Craft-retail website Etsy is expected to soon release a prospectus for an IPO.
Futures suggest the:
S&P 500 will open 6 points lower at 2,017 with the
Dow Jones expected to open 52 points lower at 17,561 and the
NASDAQ Composite 9 points lower at 4,157.
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