US markets steadier after sharp swings | Calamatta Cuschieri

Market recap, SpaceX’s Falcon Heavy flying high and oily news

SpaceX - Falcon Heavy rocket aced its first launch on Tuesday
SpaceX - Falcon Heavy rocket aced its first launch on Tuesday

Signs of volatility have been rising in recent weeks, as investors digest the impact of new tax cuts and tighter central banking policies, among other shifts.

On Wednesday, the Dow Jones was down less than 0.1%, while the S&P 500 fell about 0.5% and the Nasdaq dropped 0.9%.  The indexes began losing steam in afternoon trade shortly after a rise in the 10-year Treasury yield.

Declines in technology and energy shares weighed on the markets, which have seen a sudden increase in volatility. Investors are worried about policy shifts, including higher interest rates. Yesterday’s declines came after US lawmakers announced a budget deal, which would lift spending caps and could add to the inflationary pressures. European stock markets also recovered ground on Wednesday, but a rally in Asia faded.

The next goal for SpaceX

The billionaire CEO of SpaceX, Elon Musk hosted a press conference after the company's Falcon Heavy rocket aced its first launch Tuesday.

The new rocket is slated to fly a hefty telecommunications satellite for Arabsat, a Saudi Arabia-based firm, during the first half of 2018. It's also signed up to deliver a payload for the U.S. Air Force sometime this year.

Musk, however, was more interested in talking about what SpaceX will build next. He declared that the company is still focused on its ultimate goal: Sending humans to live on Mars. Musk revealed his most recent plan at a conference in Australia last year. It involves a truly enormous launch vehicle, called BFR or Big Falcon Rocket. BFR needs enough power to vault a 160-foot long spacecraft into space before it can begin the month’s long trek to Mars.

The company is developing a spacecraft that can fly humans into orbit. It's called Crew Dragon, and NASA plans to use it to ferry astronauts to and from the International Space Station. Since 2011, the United States hasn't had a spacecraft capable of sending humans to orbit.

In 2014, NASA turned to the private sector for help. It awarded contracts to SpaceX and Boeing to develop systems that can transport astronauts. The goal was to end its reliance on Russia in 2017. Indeed, SpaceX continues to produce technical feats on which the Russian space industry has given up. The Soviet Union tried something similar in the 1960s and early 1970s. But it was a failure.

Musk said Tuesday that he's planning to hit NASA's latest target of launching astronauts on Crew Dragon by December. In 2012 Dragon became the first commercial spacecraft to deliver cargo to the space station and it was also designed from the beginning to carry people Crew Dragon will launch on a Falcon 9, the rocket SpaceX has flown since 2010.

As SpaceX announced "It can launch payloads straight to Pluto and beyond...it can launch giant satellites and opens up a new class of payload."

US oil export flow into the markets worldwide

The United Arab Emirates, a model Persian Gulf petro-state where endless billions from crude exports feed a giant sovereign wealth fund, isn’t the most obvious customer for Texan oil.

The cargo of American condensate, a type of very light crude oil, was preferred to regional grades because its superior quality made it more suitable for the U.A.E’s processing plants.

The end of a ban on U.S. exports in 2015 coupled with the explosive growth of shale production, has changed the flow of petroleum around the world. Shipments from U.S. ports have increased from a little more than 100,000 barrels a day in 2013 to 1.53 million in November, traveling as far as China and the U.K. The U.S. exported about 700,000 barrels of light domestic crude in December to the U.A.E

With rising crude exports, the U.S. net oil imports have plunged to below 3 million barrels a day, the lowest since data available starting 45 years ago. The U.S. could become a net petroleum exporter by 2029, as analysts said. Until last year, the U.A.E. relied on Qatar for its condensate supply. But the two countries are embroiled in a political dispute, and the U.A.E. decided in June to ban all petroleum ships from Qatar.

Disclaimer:

This article was issued by Linda De Luca, Trader at Calamatta Cuschieri. For more information visit, www.cc.com.mt. The information, view and opinions provided in this article is being provided solely for educational and informational purposes and should not be construed as investment advice, advice concerning particular investments or investment decisions, or tax or legal advice. Calamatta Cuschieri Investment Services Ltd has not verified and consequently neither warrants the accuracy nor the veracity of any information, views or opinions appearing on this website.

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