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Par Geoffrey Smith
Investing.com – The big freeze in Texas continues, pushing oil prices to new 13-month highs. Bond yields also hit their highest level in 12 months, as the economy’s recovery strengthens. Warren Buffett reduces his bet on Apple (NASDAQ 🙂 and invests in Verizon (NYSE 🙂 and Chevron (NYSE :). Data on retail sales and industrial production are awaited. Here’s what you need to know about the financial markets on Wednesday, February 17.
1. Texas is still frozen; oil reaches its highest level in 13 months
The energy crisis affecting Texas has reached its fourth day, leaving hundreds of thousands of homes and businesses across the state without power.
Network operator ERCoT said late Tuesday that it was “restoring the load as quickly as possible and stably”, but said it expected the outages to last until Wednesday.
“Generators of all types of fuel continue to fight against freezing temperatures,” he added.
Unlike early reports which attributed the outages primarily to the failure of state wind turbines, it is now clear that all energy sources were affected by the cold snap. In addition, many power plants have gone out of service rather than paying rising spot prices for, which current regulations prohibit them from passing on to consumers. The gas supply has been affected not only by the frozen wellheads, but also by the increase in demand which has resulted in a drop in pressure in the gas pipelines.
Crude oil prices remain at high levels due to the loss of Texas oil production. Futures contracts rose 0.9% to $ 60.94 per barrel, while futures contracts rose 1.1% to $ 64.06.
2. Refinancing operations affected bonds
US Treasury bond yields hit their highest level in nearly a year after President Joe Biden underlined impending deluge of supplies by again promising to “spend big” to support recovery economic after the pandemic.
The yield on 10-year bonds reached 1.33%, before falling back to 1.29% at 1:25 pm. The 30-year yield peaked at 2.11% before falling back to 2.06%. With short rates stuck at or near zero by the Federal Reserve, the yield curve is now at its steepest point in years.
While the higher yields took the du index to its highest level in a week, they did not prevent us from continuing to bet on the depreciation of the fiat currency. The price of the rose another 5% to $ 51,500.
3. US equities should open lower; Shopify and Hilton publish their results
US equity markets are expected to pause to open after setting new highs on Tuesday, helped by strong performance in energy stocks, due to what is expected to be only a temporary cold spell.
As of 1:30 p.m., the was down 11 points – less than -0.1% – while the contract was down 0.1% and the was down 0.2%.
Shopify (NYSE:), Analog Devices (NASDAQ: and Hilton International topped the daily profit list, Marathon Oil (NYSE 🙂 and the lithium miner Albemarle (NYSE 🙂 having made post-closing statements.
4. Buffett reduces the position on Apple to bet on Chevron, Verizon, Marsh
Warren Buffett cut his bet on Apple and invested some of the proceeds in multi-billion dollar bets on Chevron, Verizon and insurance broker Marsh & McLellan, according to an SEC report released by Berkshire Hathaway (NYSE: ) after the market closes on Tuesday.
Berkshire’s stake in Verizon (NYSE 🙂 was $ 8.6 billion as of Dec.31, while its stake in Chevron (NYSE 🙂 was $ 4.1 billion, according to the filing.
Berkshire remains the largest institutional investor in Apple (NASDAQ 🙂 with a stake of $ 120 billion.
5. Retail sales and industrial production expected
The data schedule resumes today after a brief lull. The biggest figure will be those for January at 2:30 p.m., which is expected to show scars from major closings in early 2021. They are expected to rise again for the first time in four months, with analysts forecasting a gain of 1.1%.
45 minutes later, at 3:15 p.m., January data on the will be released. The market expects it to have risen for a fourth consecutive month, albeit at a slower pace of 0.5%. Regional surveys such as the Empire State Manufacturing Index, which came out on Tuesday, were generally stronger than expected.
La will also publish its monthly property price report.
Earlier, the extent of the damage caused by the lockdown was again highlighted by a 26% annual drop in auto sales in Europe in January.
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