04.07.2022
Chicago 11, Melborne City, USA
Investments

Dow Jones marked Juneteenth with a rise in futures. Biden prepares a gift for oil workers on Independence Day

4 min 77

As U.S. stock markets marked the abolition of slavery in the U.S. and markets were closed on Juneteenth, or Liberty Day as it’s also known, Dow Jones, S&P 500 and Nasdaq futures added about one percent on Monday, June 20.

European stocks rose

Trading floors of the Old World also started the working week with growth. The stocks of the banking sector became the locomotive of the pan-European Stoxx 600, which added 0.9%, while the shares of the French automaker were the leaders of growth in Europe Renault (RNO) +9.74%, who actively reacted to the “buy” recommendation from Jefferies.

Biden is preparing a gift for the oil workers on Independence Day. Photo: Yandex Pictures

The French stock market (CAC 40 +0.6%) looked significantly weaker than the rest amid the loss of an absolute majority by Emmanuel Macron in the parliamentary elections in a country that potentially jeopardizes the economic program of the incumbent, reports CNBC. The most positive moods reigned in London. The British FTSE 100 added 1.5%.

Surfacing after a storm

The pullback of the indexes comes after a significant drop last week, during which the broad market S&P 500 showed the worst week since 2020, and America’s main industrial benchmark Dow Jones closed below the psychological mark of 30,000 points.

The reason for the sale was the active actions of the world’s largest central banks. The Federal Reserve raised the rate by 75 basis points for the first time since 1994, the National Bank of Switzerland surprised investors with the first increase since 2007, and the Bank of England made its fifth move to tighten monetary policy.

The oil market has calmed down

It should be noted that the beginning of the week brought relatively positive sentiments to the oil market. Futures for world reference grades, although they did not show signs of a clear rollback, nevertheless, gave a reason to feel calmer to the shares of oil companies. Against the backdrop of WTI approaching $109 and Brent exceeding $114, Shell (SHEL) and BP (BP) added more than 3% in London, while French TotalEnergies (TTE) rose 1.8% in Paris.

Against the background of another record strengthening of the ruble to 55.6 per US dollar, the Russian securities market continued to grow. Shares of Novatek (NVTK) +11.6%, Acron (AKRN) +8.82% and Yandex (YNDX) +6.54% helped Moscow Exchange index rise by 2.4%, and exceed the level of 2400 points.

Biden wants to end the gas tax

Unexpectedly good news for business, and the oil sector in particular, came from Washington to the opening of American trading floors on Tuesday. Joe Biden announced on Monday the preparation of a temporary gas tax holiday. The White House plans to announce this event this week, and by the Independence Day of the United States on July 4, Americans should already be enjoying the new fuel prices with might and main – this is how they see the course of events in the Oval Office.

The attempt to make life easier for America’s motorists comes ahead of an upcoming June 23 meeting between US Energy Secretary Jennifer Granholm and refinery executives amid intense tensions between the White House and the United States oil industry.

A stumbling block could also be the potential suspension of funding for a number of road projects under the infrastructure bill Biden signed into law last year if the tax holiday is introduced. The Ministry of Energy, according to Granholm, excludes such an option. But not everything is as rosy in the American kingdom as it might seem at first glance.

Republicans will oppose

The CNBC interlocutor claims that the Republicans will in every possible way prevent the approval of this step in Congress. “They don’t want gasoline prices to go down, they need Biden’s problems,” a White House official reveals opponents’ plans, and at the same time recalls a comment by Florida Senator Rick Scott for Wall Street Journal “Rising fuel prices and inflation are a goldmine for us.”

Chevron to support Dow Jones on Tuesday?

Whatever the outcome of Biden’s initiative, and most likely it will end positively, this is a positive signal for the shares of oil and oil refining companies. Especially considering the fact that at the end of last week the best sector of the current year still got it, and the papers of oil companies became one of the leaders of the fall. Recall that on Friday alone, the shares of the “Big Three” ExxonMobil (XOM), Chevron (CVX) and ConocoPhillips (COP) collapsed by 4.5% – 8.5%.

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