Global Market Volatility: Soaring Oil Prices Lead Energy Sector Surge

Global Market Volatility: Soaring Oil Prices Lead Energy Sector SurgeInternational oil prices surged on the 18th. December delivery light sweet crude oil futures on the New York Mercantile Exchange (NYMEX) rose $2

Global Market Volatility: Soaring Oil Prices Lead Energy Sector Surge

International oil prices surged on the 18th. December delivery light sweet crude oil futures on the New York Mercantile Exchange (NYMEX) rose $2.14 to settle at $69.16 per barrel, a 3.19% increase. Similarly, Brent crude futures on the London ICE exchange climbed $2.26 to settle at $73.30 per barrel, a 3.18% gain. This oil price jump fueled a rally in US energy stocks. ExxonMobil rose 0.85%, Chevron 0.62%, ConocoPhillips over 1%, Schlumberger 0.74%, and Occidental Petroleum over 1%. Reuters reported that the outage at Equinor's Johan Sverdrup oil field, Western Europe's largest, due to a power failure, was a significant contributing factor to the price increase. Equinor is working to restore production, but the timeline remains unclear.

Meanwhile, US major indices showed a mixed performance. The Dow Jones Industrial Average fell 0.13%, the Nasdaq Composite rose 0.6%, and the S&P 500 gained 0.39%. CNBC analysts noted that investors are closely watching Nvidia's earnings report, due Wednesday, and believe it could be the next market catalyst.

Large US tech stocks saw mixed results. Tesla's stock price jumped over 5%, Google rose over 1%, Apple climbed over 1%, Microsoft gained 0.18%, and Meta Platforms (Facebook) rose 0.06%; however, Amazon fell 0.45% and Nvidia dropped over 1%.

Chinese stocks listed in the US (Chinese ADRs) performed strongly overall, with the Nasdaq Golden Dragon China Index rising 1.71%. Among the significant gainers were Jiayin Group and SHANDA Games, both exceeding 10%; RLX Technology, nearing 8%; Bilibili, ADO, and Dingdong Maicai, all exceeding 4%; and NIO, Tencent Music, NetEase, and Trip.com, all exceeding 3%. However, some underperformed, with Kingsoft Cloud falling over 14%, Zai Lab down almost 7%, DouYu over 3%, and iQIYI and Waterdrop down over 2%.

European major indices showed mixed results. The German DAX fell 0.11%, the French CAC 40 rose 0.12%, the UK FTSE 100 gained 0.57%, and the Euro Stoxx 50 fell 0.09%. Reuters analysis attributed the weaker performance to declines in interest-rate-sensitive real estate stocks, with investors closely monitoring comments from European Central Bank policymakers to gauge future interest rate directions.

Beyond oil prices and stock market fluctuations, several other significant events warrant attention. The Metropolitan Transportation Authority (MTA) board in New York City approved a revised congestion pricing plan, the first of its kind in the US. Starting January 5th, 2024, vehicles entering Manhattan south of 60th Street during peak hours will face a charge of at least $9, gradually increasing to $15 by 2031. The plan aims to raise $15 billion for modernizing the transportation system. However, President-elect Trump previously opposed the plan and intends to terminate it upon returning to office.

The Japan National Tourism Organization proposed lifting the spending cap on tax-free shopping for foreign tourists as part of its fiscal 2025 tax reforms, aiming to further stimulate inbound tourist spending. Currently, the daily limit per store is 500,000 (approximately RMB 23,000). The organization argues that this cap restricts sales growth, especially given the yen's depreciation. However, removing the cap might also lead to increased tax-free goods resale, requiring countermeasures from the Japanese government. Shopping expenses constitute a significant portion of inbound tourist spending in Japan, accounting for 26.5% in 2023.

US budget airline Spirit Airlines filed for bankruptcy protection, citing increased losses, heavy debt, intensified competition, and a failed merger attempt. The company stated it will continue operations while restructuring debt and aiming for a turnaround by early next year with reduced debt and improved financial flexibility. Creditors have agreed to provide an additional $300 million in funding. Spirit's low-fare model influenced other US airlines to offer simpler "basic economy" seating. Its bankruptcy may alleviate pressure on other airlines to maintain low fares.

Goldman Sachs predicted higher gold prices in 2025, forecasting a price of $2,943 per ounce by the fourth quarter of 2025, over 12% higher than the current price of around $2,615. Goldman Sachs cited increased global uncertainty and the potential for higher tariffs and escalating trade tensions under a Trump administration as driving investors to gold as a safe-haven asset.

Furthermore, China's Ministry of Finance has allocated a debt quota of 6 trillion yuan to local governments, urging them to implement policies. Some provinces have commenced issuance; for example, Henan province successfully issued 318.169 billion yuan of 2024 refinancing special bonds to replace existing implicit debt.

Beijing has abolished the distinction between ordinary and non-ordinary residential housing, impacting real estate tax policies. Post-abolition, individual home sales will incur different value-added taxes based on holding periods.

Several real estate companies have made progress in their offshore debt restructuring, with Country Garden submitting initial terms of its offshore debt restructuring plan to some creditors. Market stabilization and improved market confidence have accelerated debt resolution.

The National Financial Regulatory Administration issued a notice to regulate financial reinsurance contracts and strengthen supervision to prevent insurers from using financial reinsurance to conceal their operating data.

Discussions continue regarding Bitcoin as a US reserve asset, but its likelihood remains low considering policy, market, and regulatory aspects.

Multiple brokerage firms released 2025 macro and strategy outlook reports, generally expecting sustained positive policy and significant growth potential for the Chinese economy, with the A-share market poised to continue its upward trend. In terms of asset allocation, brokerages generally favor technology growth and dividend-paying stocks.

Zhou Ting, a director at Sansan Technology, was appointed chairman, with former chairman Zheng Ju becoming vice-chairman.

These are some of the key recent developments in global financial markets. These events are interconnected and collectively shape the future direction of the global economy. Investors should closely monitor these developments and make investment decisions accordingly.