It is a new week in the financial markets, and one that begins with a lot of pessimism among investors.
As we have mentioned previously, Evergrande Group, one of the biggest developers in China, is very close to going under as it is expected to default on its loan payments this month. Other Chinese companies within the same sector are also in danger, but Evergrande is so far the most high-profile case of such a company defaulting.
As a result, market sentiment has been quite pessimistic since the Asian session opened. Major Chinese stock indices such as Hang Seng have dropped in value today, mainly dragged down by the drop in the stock value of development companies.
The US market session is likely going to go in a similar direction due to the negative mood of investors. In addition, there are several high profile events this week such as monetary policy meetings of the Bank of Japan and, perhaps more importantly, the Federal Reserve, which are likely going to make investors a bit more hesitant in the days leading up to the announcement of the results of said meetings.
Thus, all major US stock indices will trade lower today. Companies to watch out for include streaming giant Netflix, which did quite well at this year’s Emmy awards.
Tesla is also a company to keep an eye on today because its self-driving software has faced a lot of criticism lately and was lambasted in a recent article by the Wall Street Journal. CEO Elon Musk had previously announced an expansion to Tesla’s self-driving services, but there are still valid safety concerns over those, which may harm the company’s reputation and stock value.
In Europe, all eyes are on the energy sector, where a recent spike in the demand for natural gas caused a spike in the value of this commodity. At the moment, there is better supply of renewable energy compared to last week and more contacts are being negotiated between energy suppliers and both the EU and the United Kingdom, which is helping to bring prices back down. Nevertheless, another spike in demand is expected soon with the arrival of the colder months.
