International News 01/02
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Oil prices closed higher due to geopolitical tensions and positive economic data.
Late on Tuesday, oil prices rose due to positive economic growth forecasts and rising tensions in the Middle East, which offset concerns about Chinese demand. Brent crude futures for March 2024 increased by 47 cents to $82.87 per barrel, while the more active April 2024 delivery contract closed up 67 cents to $82.50 per barrel. West Texas Intermediate (WTI) crude oil futures for March 2024 delivery rose by $1.04, or 1.35%, to $77.82 per barrel. The International Monetary Fund's raised global economic growth forecast improved the outlook for the US and China, contributing to positive sentiment. Despite concerns about the real estate crisis in China, analysts still perceive the oil market's supply risks as bullish. The ongoing conflict in the Middle East also supported the increase in prices.
The wave of mass layoffs is not over, as UPS plans to cut 12,000 workers.
United Parcel Service (UPS) plans to cut around 12,000 jobs and explore strategic options for Coyote, a trucking service provider, due to lower-than-expected full-year revenue. This announcement caused an 8% drop in UPS shares on the New York Stock Exchange. UPS's performance has been affected by reduced demand from the retail, manufacturing, and high-tech sectors. UPS CEO Carol Tome announced plans to reduce costs by $1 billion due to disappointing performance throughout the year. Tome also expressed a desire to find new ways to offer Coyote's services without additional costs. Despite reaching $4 billion in revenue during the COVID-19 shipping boom, Coyote's revenue has since declined. UPS does not anticipate improvement in business conditions until the second half of 2024.
The Nasdaq and S&P 500 closed weak ahead of tech companies' performance reports.
On Tuesday, Wall Street closed with mixed results as investors awaited a series of corporate earnings releases and the Federal Reserve's monetary policy meeting. The Nasdaq and S&P 500 indices weakened, while the Dow Jones Industrial Average index closed higher. Of the eleven sectors in the S&P 500, six gained, with the financial sector leading with a 1.2% increase, followed by the energy sector's 1.01% gain. However, Alphabet Inc and Microsoft Corp experienced a decline in their shares during extended trading after the release of their fourth-quarter earnings reports. Investors expressed caution due to the uncertainty surrounding earnings releases. Economically sensitive sectors, such as Dow Transports, chips, and small-cap stocks, underperformed the broader market. The US Department of Labour reported an unexpected increase in job openings, indicating that the market remains strong enough for the Fed to hold off on hiking interest rates.