- US equity futures fell as the OPEC+ alliance's plan to cut oil supply fueled inflation fears and traders awaited labor-market data to assess the risk of a recession.
- Futures on the S&P 500 and Nasdaq 100 each fell 0.6%, while Europe's Stoxx 600 reversed a gain. US crude futures maintained a weekly gain of about 11% after the oil cartel announced a 2 million barrel reduction in daily output. Treasury yields remained stable.
- While higher energy prices may cause inflation, some investors believe they will reduce demand and harm corporate earnings, potentially encouraging the Federal Reserve to ease monetary policy. While such expectations fueled equity gains this week, several money managers warn that the economic transition to a less aggressive Fed may be painful.
- WTI futures were trading near $88 per barrel, while Brent crude was trading around $93.30. The White House warned that the output-cut plan would have a negative impact on the global economy. The fourth-quarter price target for brent has been raised to $110 per barrel by Goldman Sachs.
- The Stoxx 600 in Europe fell as losses in energy and insurance stocks offset gains in real estate and travel stocks.
- Thursday, the dollar fluctuated between gains and losses. Britain's pound fell 0.4% and gilt yields rose after Fitch Ratings downgraded the country's outlook to negative.
- Later, ECB Accounts demonstrated inflation concerns, stating it was 'far too high' and was 'likely to remain above the governing council's target for an extended period'. The bank stated that wage growth was moderate and 'over the entire projection horizon, risks surrounding the projected inflation path remained tilted to the upside'.
