The investment suite last week had something for everyone, for bulls, for bears and for the indifferent. It would be foolhardy to not recognise the apathy which is developing in markets outside those of immediate consequence to that of equities. Here, we often muse on the direct feed that links words emitted from high-ranking politicians to price movements. When the syntax deployed by the Presidents and Prime Ministers of the world is misleading, full of nuanced invective and in some cases downright fabrication, is there any wonder that the consumers of such news have either already switched off attention or have become so immune to banality, caprice and whimsy it is as if a new vaccine is being rolled to counter the pandemic of unserious captains of politics.  

Enter then the only ray of hope and as ever it services well the bulls of stock markets. As hounds after the fox, the equity ‘bull’dogs are chasing down the Federal Reserve and harrying it into a corner where the only escape from attention is to adhere to an interest rate cut. The scent had been blooded after a succession of easing employment metrics in the United States culminating in on 5th September’s weak Non-Farm Payrolls. Last week, any doubt of an easing in the jobs market were put aside by the US Bureau of Labour Statistics’ publication of the preliminary annual revision of employment growth for the period from April 2024 to March 2025. It showed 911k or 0.6% fewer jobs created in the US economy, little wonder there was increased pricing in the CME FedWatch tool for a ‘double’ 50-basis points cut in this week’s FOMC rate decision. There is precedent for it. A year ago, which saw a BLS benchmark revision of -818k jobs, the FED in September 2024 decreased the Fed Funds Rate from 5.5 percent to 5 percent. Looser money in the US, the author of all equity buying, saw sympathetic soaring stock market bourses across the globe and it was not just the remit of the S&P and Nasdaq to knock off all-time highs and settling up 1.5 percent and 2 percent respectively. Mentioning the two prominent indicators of technology is made more worthy by the outstanding results seen from Oracle. The database software company conducts business with and provides services to every corner of the computing industry from Nvidia to Meta. Not only did it sign a new five-year deal with OpenAI worth $300 billion, its growth in its Oracle Cloud Infrastructure (OCI) business will grow 77% to $18 billion in its current fiscal year and soar to $144 billion in 2030. Offering stock market and particularly tech bulls a future of lower interest rates with such news in reserve sees almost zero reason why equities will not persist in outshining every other investment. 

Yes, we hear you cry. What about Gold? Indeed, its performance is more than a match for most equities in the round, the MSCI All Countries World Index is up 15 percent year-to-date whereas Gold is up 40 percent. However, Gold is not all about stock-piling, inflation and US Dollar avoidance, it is also about equity hedging. Large exposure in equities must have a disaster recovery site if perchance calamity appears and the global load in stocks is skittled, therefore, part of its performance is fuelled by equities price success. 

O, that we had such quibbles of what caused what to rally rather than the continued bearish grind of our market. For the record, M1 futures in the main five futures contracts of the oil complex finished the week thus; WTI +$0.82/barrel (+1.33%), Brent +$1.49/barrel (+2.27%), Heating Oil +0.30c/gallon (+0.13%), RBOB +2.12c/gallon (+1.08%) and Gasoil +$7.75/tonne (+1.13%). Oil is as a destitute, hanging around the recesses of investment alleys awaiting any sort of sympathetic attention. Its laggardly deportment is made more noticeable because it too should at least attempt to join in with some of the bullish atmosphere of bourses. Lower interest rates and a falling US Dollar ought to be something of peloton formation to line up behind but oil remains dogged by incessant chat on oversupply. Argue all bulls might, and even if at current production ability OPEC is unable to bring forth the new barrels it has earmarked for return, there can be little doubt that the cartel’s intention to wrestle back market share will see production match ambition. Not even another ‘red line’ testing by Russia’s violation of NATO airspace in Poland and yet another audacious military murder by Israel on Hamas leadership in the Qatari capital of Doha were enough to light at least a spark under oil price levels. The late Friday rally which made up most of the week’s gains came from Ukraine’s drone attack on the far east of Russia’s oil structures. The massive loading at Primorsk was targeted which is responsible for over 1mbpd of exports and along with the nearby 350kbpd Kirishinefteorgsintez refinery this weekend. The damage done is not as yet clear, but it does show how the reluctance to do damage to world oil flows is disappearing. 

Ukraine is then taking matters into its own hands. The Trump Administration continues to talk the talk over sanctions and secondary tariffs, but each deadline comes and goes and still oil revenue pours into the Kremlin’s war coffers. It would appear the US is unwilling to upset the delicate trade negotiations with China that are currently underway in Madrid. The President has resorted to calling out ‘Europe’ (Hungary, Slovakia and Slovenia) and NATO (Turkey) for complicity and will not impose further levies while Russia receives energy revenue from these quarters. It also wants Europe to impose sanctions of between 50 and 100 percent on China because of its oil relationship with Russia. There is absolutely no way any of this happens until, if indeed the US still wants to be, the so-called leader of the West, does what it says in the grandiose title and ‘leads.’ 

Extra tariffs and sanctions, be they primary or secondary can be ignored at present, which is why oil prices are in a considered mood over the attacks on Russia’s oil capabilities. Without massive damage, a lack of threat fulfilment from tariffs et al, and the promise of further oversupply as highlighted by the International Energy Agency’s prediction of an almost glut in 2026 (with caveats), will keep bulls from oil’s door. Another worrying emergence were the abject economic readings from China this morning. Fixed Asset Investment, Industrial Production and Retail Sales all missed expectation by enough margin as to question its 5% GDP target and why China proceeds in such voluminous Crude imports other than that for strategic purposes. If one should fancy being bullish, look to equities. If one should fancy continued disappointment, look to oil.

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