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Banks soar while commodities fall

by LLB Finance Reporter
7th Nov 23 12:49 pm

As inflation rates ease, production rates increase and demand for commodities lowers, the commodities and financial markets continue to experience volatility.

Consumers may be interested to note that Bank of America and Goldman Sachs as well as Groupon have risen in value, while crude oil, brent oil, and cotton have dropped.

Goldman Sachs share price has risen which comes as bonds are now increasingly attractive for investors.

Kate Leaman, chief market analyst at AvaTrade, said,  “Looking at our most rising table last week, Bank of America has surged significantly in value.

“This hike followed the release of the bank’s positive jobs report which indicated a peak of interest rates. This not only ignited a rise in the BofA’s shares, but also triggered an increase in other banking stocks.

“What’s more, Goldman Sachs has also saw its share price rise. This comes as bonds have become increasingly attractive to investors due to inflation rates easing. Low inflation causes the value of bonds to increase as it reduces the value of future capital and income payments.

“Elsewhere, Groupon has seen its value rise considerably. As consumers limit their spending, shoppers may be inclined to find discounts leading to an increase in demand for Groupon’s services.

“The coupon discount company is up almost 60% year-to-date and 107% in 2023. In fact, analysts anticipate that the stock will jump a further 5.20% over the next year.

“On our most falling table last week, cotton has declined in value. As one of the largest exporters in the world, Pakistan, has witnessed a large uptick in production, with cotton manufacturing increasing by 82% on a year-on-year basis.

“Approximately, 6.8 million bales were delivered to the ginning factories at the end of October, significantly outpacing demand.”

Both brent and crude oil has “dropped in value” this last week, despite tensions continue to soar in the Middle East with the possibility of all-out war in the region.

Leaman added, “What’s more, both brent and crude oil have dropped in value last week with brent oil falling to $89 a barrel and crude dropping to $84 a barrel.

“As the conflict in the Middle East continues, there are wide-ranging market concerns over the health of the global economy and what this means for the demand in oil. In fact, demand is lowering worldwide, especially in Europe.

“However, with the ongoing conflict, the price of the commodity is expected to remain volatile throughout the remainder of 2023.”

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