Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Taliban Victorious, Chinese Economy Slows, Oil Falls - What's Moving Markets

Published 08/16/2021, 06:37 AM
Updated 08/16/2021, 06:42 AM
© Reuters.

© Reuters.

By Geoffrey Smith 

Investing.com -- The Taliban has taken control of the Afghan capital Kabul amid a chaotic evacuation of remaining westerners. The Chinese economy is slowing down due to the clampdown on localized outbreaks of Covid-19 across the country. That's also hitting oil prices. And U.S. stocks are set to open lower amid reports of the Federal Reserve plotting a speedy exit from asset purchases. Here's what you need to know in financial markets on Monday, 16 August. 

1. Taliban overruns Kabul

The Taliban recaptured the Afghan capital of Kabul, 20 years after being driven out by U.S. forces and only weeks after President Joe Biden announced the withdrawal of those troops.  Only a month ago, Biden had said there was no likelihood of the U.S.-trained government forces being overrun.

At least five people were killed in chaotic scenes at Kabul airport that recalled memories of the 1975 evacuation of Saigon at the end of the Vietnam War.

Taliban spokesmen quoted in various reports have pledged a peaceful transition but nonetheless promise to reimpose their strict interpretation of Islamic law in the country.

2. Chinese data point to slowdown

China’s economy is slowing down due to the increasing restrictions it has imposed to stop the spread of the delta variant of Covid-19.

Industrial production and retail sales data for July, released overnight, were both lower than expected. Output growth slowed to 6.4% from 8.3% in June, its slowest rate since September last year. Retail sales growth meanwhile slowed to 8.5% from 12.1%, its slowest rate in six months.

Investment in fixed assets, historically the biggest driver of GDP growth in China, likewise slowed more than expected to only 10.3% growth from 12.6% in June.

China’s zero-tolerance approach to Covid-19 outbreaks shut a terminal at the world’s third-largest port of Ningbo-Zhoushan last week, suggesting that constraints on the country’s external trade are likely to be a feature of upcoming data.

3. Stocks set to open lower; Fed reportedly eyes speedy exit from QE

U.S. stock markets are set to open lower later, chiefly on the back of Chinese data that have again dented the global growth outlook.

By 6:15 AM ET (1015 GMT), Dow Jones futures were down 157 points, or 0.4%, while S&P 500 futures were also down 0.4% and Nasdaq 100 futures were down 0.3%.

Also weighing on sentiment was a Wall Street Journal report claiming that the Federal Reserve is looking at ending its asset purchases by the middle of next year, implying a quicker phase-out of quantitative easing than in 2013, when it began to tighten policy after the Great Recession.

4. Crypto hits $2 trillion market cap again

The crypto universe reclaimed a market valuation of $2 trillion, after a broad-based rally fired by changes to the way the Ethereum blockchain will work in future.

Ethereum plans to move away from the ‘proof of work’ model that requires vast amounts of computing power to mine new coins, an attempt to counter the narrative that cryptocurrencies are environmentally harmful because of their carbon footprint.  Also helping sentiment has been evidence of bipartisan support for the industry in Washington, despite its failure to ensure favorable tax treatment in the wording of last week’s infrastructure bill.

By 6:15 AM ET, Ethereum was up 4.3% at $3,286, while Bitcoin was up 3.0% at $47,286. Dogecoin was also up 13% and Cardano, which rallied some 50% last week, gained 2.2%.  

5. Oil prices slide as Chinese fuel output hits 14-month low

Crude oil prices tumbled again after China’s weak economic data raised doubts over the trajectory for global demand. The industrial production data released earlier showed that independent refiners cut their average daily throughput to the lowest level since May last year.

By 6:30 AM ET, U.S. crude futures were down 1.4% at $67.25 a barrel, while Brent futures were down 1.3% at $69.70.

Data on Friday from the Commodity Futures Trading Commission had shown that money managers cut their net long positions in crude futures and options by nearly 10% in the week through Aug. 10, suggesting that the short-term momentum of the market is weakening considerably amid fears that the pandemic won’t, after all, be controlled this year.

Latest comments

Nursing home patient economics and politics
another Biden blunder. The pullout could have been much much better planned!!
why did we go in the first place
Bin Laden and 9/11
And Bush and Cheney and Rumsfield and Rice
Bin Laden was harbored in Afghanistan when he orchestrated the 9/11 attacks. When the Taliban would not coordinate his capture and release to the U.S., Bush utilized a ''you're with us or against  us'' doctrine to declare war on all ''enemy combatants'' and whomever harbors or aids them in any manner whatsoever. By then bin Laden had fled to Pakistan. A special ops squad assassinated him several years later during the Obama administration. Same as 20 years ago, the U.S. continues to aid Pakistan.
almost a defeat like in  vietnam , sad situation feel sorry for afghan people.
Two trillion dollars , twenty years time, huge deficit and total return? zero learn lesson and stop interfering in other countries and stop toppling other countries governments.
😀😀😀😀
When I saw this news i bet on doller but I lose 50 doller at once 😀
heading towards a GulfWar3 that will be the Stone Age when they've finished!! it's like the US wanting this to happen to create an excuse of all excuses
Time to let China go in there and get there check book out. Have fun
Their
Afghanistan 🇦🇫 war end but dicicit will remain next generation have to remember everyday and pay.
uh oh... you know all the chairborne rangers and lazyboy generals are gonna have something to say with that headline
lol chairborne
lol chairborne
two trillion dollars, twenty years time, and total return? zero. should this money manager be fired?! when our politicians can ever be held accountable?
Never lmao 🤣
😭😭😭😭
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.