General, Market Event

Weekly Review: Venezuela causing further US-Russia tensions, Brexit deadlock continues

Ben Weiss, Tuesday, 5 February 2019

Ven pro 3

Thousands of Venezuelans took to the streets to protest President Maduro’s rule. Source: Voz de America (Public domain, CC0 1.0).

Continued political turmoil in Venezuela saw the US and Russia get involved, as President Nicolas Maduro clings onto power amidst an uprising and severe citizen unrest. Speaking of the US, positive Nonfarm Payroll figures implied yet more growth despite the government shutdown and trade war with China. A number of the big tech firms had fallen victim to latter, as earnings reports continued to be released to mixed results. Back across the Atlantic, the UK is still suffering a Brexit deadlock.

Venezuelan President impacting price of oil

Nicolas Maduro is clinging on to power amidst mass protests, hyperinflation and an opposition leader who has already been recognised as the new president by a host of major UN nations.

The US and Russia are now getting involved. Maduro’s communist regime is backed by Russia and opposed by the US, and both have weighed in on the issue.

In terms of trading, you might think that it is irrelevant as economic implications at present remain relatively contained within the context of Venezuela. However, considering the South-American nation is one of the top oil exporters in the world, it could have a huge influence on some equity prices.

US sanctions imposed on Venezuela have meant oil prices rose in expectation of a disruption is supply. This has caused volatility and fluctuations in oil markets such as Brent Crude, Nymex Crude and the US Oil Reserve.

As the ongoing disturbances is Venezuela continue, this could be the outlook for the oil markets until a resolution is found. Trade the aforementioned oil equities here.

Brexit Plan APlan B... Plan A

It’s getting to the point where most people now just feel like packing it all in, regardless of the implications. Brexit’s date, 29 March, draws ever closer, and yet somehow, it’s never seemed so far off.

Talks between Theresa May, fellow MPs and industry leaders ultimately lead everyone agreeing for the PM to return to Brussels with certain amendments to renegotiate with the EU. Within minutes, senior officials within the EU said they would not renegotiate on the deal, and there it seems to have been left. No progress… no deal… no hope?

May’s Plan B, which was really just her Plan A, has ultimately failed (again), and yet there’s not such a sombre mood in this vote’s aftermath. Where does Brexit go from here though? Another meaningful vote is scheduled for mid-February, where May was hoping to present the revised deal to a willing Parliament. In reality, with negotiation from the EU unlikely, it will be another night of trying to convince MPs to approve a deal they’re not fully happy with. After that… who knows? A delayed Brexit looks the most likely outcome at the moment.

Nonfarm Payroll figures suspiciously positive

Thousands of jubilant Americans flocked to the streets of Boston on Sunday evening, sporting New England Patriots shirts and chanting songs about Tom. Either they were celebrating the stronger-than-expected NFP figures, or the Patriot’s Super Bowl victory; both would make sense.

Despite a damaging government shutdown and a trade war with China, NFP figures were surprisingly strong again this month. Expectations were that 165,000 jobs would be added in January, however the actually figure was nearly double that at 312,000. Unemployment rose slightly, reaching the 4% mark, but this could even be seen as a positive. Yes, more people who are actively looking for a job don’t have one, but equally, more people are leaving their current positions as they feel confident in the number of other jobs available.

This aligns with the rise in the Dow across January, as the US index enjoyed a 7% price increase. That’s still going up in the aftermath of this latest, strong jobs report. Will this trend continue throughout February?

Wall Street Jan

Graph showing the price of the Dow over the last few days. Source: ETX TraderPro. 

Trade the Dow, SP 500 and a range of other US indices on our award-winning TraderPro platform.

US reports

US tech reports have continued to be released by major players in the industry. This week’s reports were fairly positive, with Tesla, Facebook and Apple perhaps being the highlights. The former saw heavy turbulence in the direct aftermath of the report, whereas Facebook and Apple enjoyed their prices increase.

Tesla price 05.02

Price of Tesla Motors in the aftermath of its earnings report. Source: TraderPro.

Twitter’s release is the last of all the major companies, which will come out on Thursday. Will its price experience similar change? Trade here.


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