A week of May 2022 has already passed, and, luckily, the giant economies are showing complete signs of stability. It is being expected that European stock markets will open higher after tracking impressive gains on Wall Street. It is also being noticed that the Federal Reserve has enhanced the interest rate by 50 points. As the industrial activities are gaining momentum, the global market is coming on track. The DAX futures contract in Germany made a gain of 0.4%, the FTSE 100 futures contract in the United Kingdom rose by 1.1%. Similarly, the CAC 40 futures in France rose by 2.3%. Also, it is important to note that the US central bank increased its benchmark interest rate, which was about half-point. The management said that it might start tapering its $9 trillion bond portfolio. Inflation, which is at the highest point in the last four decades, can be controlled only through such measures.
The smart investors take all the necessary factors into consideration, and inflation is one among them. Some investors are thinking that the central bank can raise the rate a bit higher in the upcoming meeting, but it is not likely to happen. The investors are happy that the blue-chip Dow Jones Industrial Average made a gain of 2.85 or 1,000 points. The tech-heavy Nasdaq Composite rose by 3.2%. Similarly, the broad-based S&P 500 climbed by about 3%. In Europe, the Bank of England is also expected to increase its benchmark interest to control the soaring consuming prices. Anheuser-Busch InBev (EBR : ABI) which is considered the world's biggest brewer reported that in the first quarter, it had registered higher than expected earnings. It was because the consumers had embraced higher prices.
As the tourism, hospitality and travel sector is in full swing, the Air France KLM (EPA:AIRF) is expected to taste a successful summer season. It is likely to make a huge profit due to the recovery in ticket sales. The oil prices also edged higher due to geo-political factors. It managed to add to the previous session’s gain. The European Union imports a large volume of oil from the Russian federation. The European Union is the world's largest trading bloc, but it is now planning to end its dependence on Russian oil. Already, Russia and its neighbor Ukraine are locked in a conflict. Several European nations are actively supporting Ukraine. The gold futures made a gain of $1,899.54/oz or 1.6%.
The role of the OPEC in the current time
The Organization of Petroleum Exporting Countries and its allies had agreed to enhance the oil production target by over 4,00,000 barrels per day in the month of June. The oil was hovering at $110 per barrel. The US crude futures were trading at $108.72 a barrel, which is 0.9% higher. The Brent contract made a gain of 1%, and it rose 1% to $111.25. It is interesting to note that both the benchmarks rose more than $5 a barrel.