The sawtooth market is expected to fall as Russia cuts gas supplies

The ASX should open lower today.

The local stock market had a strong day for the energy and materials sector on Friday, but that was offset by declines among banks and healthcare companies.

All of this led to the S&P/ASX 200 finishing nearly flat with a 0.02% gain to 7114.5 points.

Concerns about shortages have pushed the energy sector as Europe heads into fall.

Whitehaven Coal Ltd jumped 6.2% to $7.36, with New Hope Corporation Limited up 4%.

Additionally, oil and LNG majors Santos and Woodside rose more than 4%.

On the other hand, TPG Telecom Ltd (ASX:TPM) fared worse after missing analysts’ expectations for sales and earnings. It fell 12.4% to $5.80.

Chicken farmer Inghams Group Ltd lost 9.4%.

In the Northern Hemisphere, Wall St ended its four-week winning streak on Friday.

US stocks ended the week sharply lower as minutes from the Federal Reserve’s July meeting, along with comments from several Fed officials, indicated that the central bank is still determined to raise its cash rate. to fight inflation.

The Dow Jones Industrial Average fell 292.30 points, or 0.9%, to end at 33,706.74. The S&P 500 fell 1.3% and the Nasdaq Composite ended down 2%.

The Dow lost 0.2% on the week, the S&P 500 fell 1.2% and the Nasdaq fell 2.6%.

It was not a good week for gold, which fell to its lowest price in more than three weeks.

Here is what we saw (source Commsec):

  • The euro fell from a high near US$1.0095 to a low near US$1.0030 and was around US$1.0034 at the close in the United States.
  • The Australian dollar fell from near 69.20 US cents to 68.60 US cents and was close to 68.72 US cents at the close in the United States.
  • The Japanese yen eased near 136.20 yen to the US dollar at 137.20 JPY and ended US trade near 136.93 JPY.
  • World oil prices rose slightly on Friday. A stronger US dollar limited gains. “A stronger greenback makes dollar-denominated commodities more expensive for buyers in Europe and Asia,” wrote Craig James.
  • The price of Brent crude oil rose 13 US cents or 0.1% to US$96.72 per barrel. And the price of US Nymex crude oil rose 27 US cents or 0.3% to US$90.77 a barrel.
  • During the week, Brent crude fell US$1.43 or 1.5% and Nymex crude lost US$1.32 or 1.4%.
  • Base metal prices were mixed on Friday. Lead fell 1.5% and aluminum 0.4%, but other metals rose 2.2% (nickel). Over the week, metals fell 1.4% to 6.9%, with lead falling the most. But copper bucked the trend, rising 0.2%.
  • The gold futures price fell US$8.30 per ounce or 0.5% to settle at US$1,762.90 per ounce.
  • Spot gold was trading near US$1,748 an ounce at the close in the United States. During the week gold fell US$52.60 or 2.9%.
  • Iron ore futures fell 51 US cents or 0.5% to US$104.21 a tonne. During the week, iron ore fell US$5.65 or 5.1%.

What’s next for the Australian stock market?

Dale Gillham gives his opinion on what awaits the ASX.

“The All Ordinaries Index continued to defy logic by rising again last week, meaning it has risen for 43 trading days or eight consecutive weeks without the price falling below the low of the previous week.

“We haven’t seen such a sustained rise since November 2012, when it was up 18% over 113 days or 17 weeks. That said, the current rise is moving at a faster pace than the 2012 rise, as it rose nearly 12% in less than half the time.

“Right now the market is swinging up and it will reach a point where it will start to go down, but the problem with that is that unlike a swing where we know the tipping point, the All Ordinaries index could start its decline at What I know is that the higher the market rises, the greater the likelihood that it will fall.

“Right now there is a lot of negative news in the market and what is happening or could happen with the US and Australian economies and how it will affect the stock market.

“However, investors should be very selective about what they listen to given that what is happening in the US and Australia does not really support this bearish narrative.

“On a positive note, the reporting season so far has seen great results for a number of companies, while others have reported average or slightly below normal results, but there is no certainly no cause for alarm.”

Russia’s gas supply crisis looms

As Russia prepares to halt gas deliveries to Europe, a European gas supply shortage is now looming on the horizon.

Russian energy giant Gazprom said deliveries from the Nord Stream gas pipeline will cease from August 31 to September 2 for “maintenance”.

“It is necessary to carry out maintenance every 1,000 hours” of operation, specifies Gazprom in a press release.

“On August 31, 2022, the only Trent 60 gas compression unit will be shut down for three days for maintenance,” involving technicians from German Siemens, Gazprom said.

As a result, “gas transport via the Nord Stream pipeline will be suspended for three days”.

Deliveries will be restored to a rate of 33 million cubic meters of gas per day once maintenance is complete.

The move is expected to rekindle gas shortage fears in Europe, which has previously accused Moscow of energy blackmail.

Since the start of the war in Ukraine, Moscow has repeatedly cut gas supplies to Europe in response to European sanctions.

About Dwayne Wakefield

Check Also

Recreational Boats and Fishing Boats Market Share, Size, Demand, Key

Global recreational boat and fishing boat market Recreational boating is one of the busiest maritime …