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OPEC’s oil cut gives the Energy sector a big boost

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The Dow Jones Industrial Average added more than 300 points overnight, as Wall Street shows resilience despite an oil output cut from OPEC+ that threatens to stoke inflation and recession fears.

There will be several key pieces of economic data in an Easter shortened week for investors, including job openings data on Tuesday, ADP private payrolls report on Wednesday and the closely watched monthly jobs report on Friday.

The Dow climbed 327 points, or 0.98 per cent, to close at 33,601.15. The S&P 500 ticked higher by 0.37 per cent, closing at 4,124.51. It was the fourth positive session for both indexes. The Nasdaq Composite slid 0.27 per cent to end the session at 12,189.45.

Markets spent much of the trading session digesting the news from OPEC+ which is slashing 1.16 million barrels per day. West Texas Intermediate futures gained 6.28 per cent to settle at $80.42, and Brent futures rose 6.31 per cent to settle at $84.93.

The prospect of higher oil prices could add further unease to Wall Street as the output cut plays out,.

The Energy Select Sector SPDR fund (XLE), which tracks the S&P 500 energy sector, popped more than 4 per cent. Marathon Oil and Halliburton were the fund’s best performers, rising nearly 9.9 per cent and 7.7 per cent, respectively.

In M&A news, Ari Emanuel’s media group Endeavor, whose properties include the Ultimate Fighting Championship, has agreed to buy World Wrestling Entertainment, creating a live event behemoth and cementing its status as a leader in combat sport competitions.

The combination will create a new, publicly traded company that is 51 per cent owned by Endeavor, with W.W.E. holding the remaining 49 percent. The new company will be worth more than $21 billion; the all-stock deal values W.W.E. at $9.3 billion and U.F.C. at $12.1 billion.

In the mining industry, Canada’s Teck Resources Ltd. rejected a proposal from Glencore Plc to buy the company for shares and then spin off their combined coal businesses, in the latest sign of dealmaking heating up across the mining industry.

In lithium news, the Australia government anticipates that revenues from the export of critical minerals such as lithium and nickel will match that of coal's export revenue by 2028 amid the clean energy transition. Australia's Industry Department stated that global coal demand has passed its peak, while the demand for minerals like lithium, nickel, copper, and rare earths is expected to accelerate.

Overall, overnight, S&P500 sectors were mixed. On the back of the oil output cuts from OPEC, Energy was the standout, whilst real estate was the biggest laggard.

The SPI futures are pointing to a 0.1 per cent gain.

Clime Capital (ASX:CAM) is paying 1.32 cents fully franked

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Cyclopharm (ASX:CYC)
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Qualitas (ASX:QAL)
Treasury Wine Estates (ASX:TWE)

Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap.


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