While U.S. stock indexes celebrated the abolition of slavery in the United States and exchanges were closed for Juneteenth, or Freedom Day, as it is also known, futures contracts on the Dow Jones, S&P 500 and Nasdaq gained about one percent on Monday, June 20.
European bourses rose
The trading floors of the Old World also started the working week with growth. Banking sector shares were the engine of the pan-European Stoxx 600, which added 0.9%, while the leader of the growth in Europe was the French carmaker Renault (RNO) +9.74%, which actively reacted to the “buy” recommendation from Jefferies.
Biden is preparing a present for oil workers on the Independence Day. Photo: Yandex Images
The French stock market (CAC 40 +0.6%) looked considerably weaker than others amid Emmanuel Macron’s loss of an absolute majority in the country’s parliamentary elections, which potentially threatens the incumbent president’s economic program, CNBC reported. The most positive sentiment reigned in London. Britain’s FTSE 100 added 1.5%.
The rebound after the storm
The rollback in indexes comes after last week’s significant drop, in which the S&P 500 broad market index posted its worst week since 2020 and America’s main industrial benchmark, the Dow Jones, closed below the 30,000-point psychological mark
The reason for the sell-off was the active actions of the world’s largest central banks. The Federal Reserve raised the rate for the first time since 1994 by 75 basis points, the Swiss National Bank surprised investors with the first raise since 2007, and the Bank of England made another, fifth in a row, step to tighten the monetary policy.
It is worth noting that the beginning of the week brought a relatively positive mood to the oil market. Futures on the world benchmark grades, though they did not show signs of a clear pullback, nevertheless gave a reason to feel calmer to oil stocks. Shell (SHEL) and BP (BP) in London gained more than 3% on WTI which approached $109 and exceeded $114, while TotalEnergies (TTE) in France gained 1.8% in Paris.
The Russian securities market continued to grow amid another record strengthening of the ruble to 55.6 per U.S. dollar. Novatek (NVTK) +11.6%, Akron (AKRN) +8.82% and Yandex (YNDX) +6.54% helped Moscow Exchange index rise 2.4% to above the 2400 point level.
Biden wants to cancel the gasoline tax
By the opening of the U.S. trading floors on Tuesday, unexpectedly good news for business, and the oil sector in particular, came from Washington. Joe Biden announced Monday that he was preparing a temporary gasoline tax vacation. The White House plans to announce the event as early as this week, and Americans should already be enjoying the new fuel prices to the fullest by Independence Day on July 4, which is how the Oval Office sees things.
The attempt to make the life of American motorists easier is made in anticipation of the forthcoming meeting of the US Energy Department head Jennifer Granholm with the heads of oil corporations, which is scheduled for June 23 and will take place amid active tension between the White House and the oil industry of the United States.
A stumbling block could also be the potential suspension of funding for a number of road projects under the infrastructure bill signed by Biden last year, if the tax vacation does come into play. The Energy Department, according to Granholm, rules out that option. But all is not as rosy in the U.S. kingdom as it may seem at first glance.
Republicans will be against it
The CNBC interlocutor says Republicans will be all kinds of obstacles to congressional approval of the move. “They don’t want gasoline prices to go down, they need Biden’s problems,” the White House official reveals his opponents’ plans, and along with it recalls a comment by Florida Senator Rick Scott for the Wall Street Journal – “rising fuel prices and inflation are a gold mine for us.”
Will Chevron support the Dow Jones on Tuesday?
No matter how the Biden initiative ends, and it will likely end in the positive, this is a positive signal for oil and refinery stocks. Especially considering the fact that this year’s best sector took a beating at the end of last week, with stocks of oil refiners being one of the leaders in the fall. Recall that ExxonMobil (XOM), Chevron (CVX) and ConocoPhillips (COP) fell 4.5% to 8.5% on Friday alone.