Asian Shares, Industrial Production and Oil Demand are Back on Track

As July 2021 was inching towards its end, Asian and European shares were showing signs of stability. The impressive US corporate earnings were also playing an instrumental role in stabilizing the market. Factory activities in China were mildly affected due to inclement weather and rising costs, but the overall economic condition of Asian economies is relatively stable. It was very surprising to see that Europe's economic recovery was truly remarkable. In the last quarter, the recovery simply outpaced all expectations. As the restrictions eased, the consumers in the USA and Europe started spending money wholeheartedly. All this clearly indicates a robust payrolls report.

Most of the Asian, European and American companies are likely to register impressive profits. In the United States, the company profits are surging and some support is provided by lower bond yields. The economic experts and investment strategists are expecting that this trend is likely to continue for a few more months. The rapid vaccination programs in all countries is also encouraging economic recoveries to continue. The US earnings reports were simply striking as the analysts’ profit estimates were beaten. It is now expected that earnings will climb to 89.8% in the second quarter. Surprisingly, the forecast at the beginning of July was 65.4%.

It is also believed that in the coming days there is a further prospect of more fiscal stimulus. There is a possibility that a $1 trillion infrastructure plan can be finalized by US senators in the coming days. The optimism was clearly visible on Wall Street. The Nasdaq futures rose by about 0.4% and S&P 500 futures also registered a growth of 0.5%. The FTSE futures gained about 0.2% while the EURO STOXX 50 futures registered a growth of about 0.3%. Investors were happy to see that Chinese blue chips managed to gain 0.9%. According to experts, it is necessary to watch the regulatory tightening that is taking place in the world's second largest economy.

Oil prices continue to remain on track

As the demand continues to grow faster than the actual supply, oil prices are showing signs of stability. A minor fluctuation in demand due to miscellaneous reasons is not likely to affect the oil market. The analysts are confident that the pandemic is under complete control in Asia, the USA and Europe. Hence, the demand for oil is not likely to get affected. Industrialized nations are undertaking necessary steps in the form of massive vaccination campaigns to normalize the situation. The rapid consumption of oil and the rebound of industrial production in Asian countries clearly indicates that economies are resisting the pandemic by adopting necessary flexibility. The experts are confident that demand growth is not going to derail in any condition. According to recent reports, the biggest oil exporter, Saudi Arabia, is likely to raise prices across various grades of crude oil that is exported to Asia.



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