The Zacks Analyst Blog Highlights: Alamos Gold, Franco-Nevada, Kirkland Lake Gold And AngloGold Ashanti
Zacks Investment Research | Sep 17, 2019 10:38PM ET
For Immediate Release
Chicago, IL – September 18, 2019 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Alamos Gold Inc. (TSX:AGI) , Franco-Nevada Corp. (TSX:FNV) , Kirkland Lake Gold Ltd. (TSX:KL) and AngloGold Ashanti Ltd. (NYSE:AU) .
Here are highlights from Tuesday’s Analyst Blog:
Saudi Oil Attack Rattles Market: Bet on 4 Safe-Haven Stocks
Safe-haven assets have been much in demand since the drone attacks on Saudi oil facilities have killed investors’ risk appetite. In fact, escalating Middle East tensions continue to propel demand for safe-haven securities since the market has already been grappling with the global economic slowdown and U.S.-China tariff disputes.
Oil Prices Spurt After Saudi Attack
The drone strikes have compelled Saudi Aramco, the biggest oil producer in the world, to suspend daily production of 5.7 million barrels of crude. The loss is equivalent to roughly 6% of the global oil output.
The disruption in crude supply has pushed the West Texas intermediate (WTI) crude futures roughly 15% higher to $62.90 a barrel. This marked the largest increase in a day for the commodity in 10 years. The Brent crude also moved north to settle at $69.02 a barrel. Notably, the 15% gain in the global oil benchmark is the highest on record.
Will it Weigh on US Consumer Spending?
The recent strike has raised concerns among investors of more attacks on Saudi Arabia amid intensifying Middle East tensions. Thus, there are possibilities of a further spike in crude prices. The sustained rise in energy prices could significantly lift room heating bills and reduce disposable income of consumers.
Since, consumer expenditure primarily drives the U.S. economy, any curtailment in spending by domestic consumers will hurt the economy which is already under the threats of a global economic slowdown and Washington-Beijing trade dispute.
Gold Stocks Shine
Investors are also apprehensive that the consistent rise in oil prices will lead to sustained inflationary pressure. In fact, the Fed is likely to consider this before opting for a second rate cut, following the first one in July since 2008, to protect the domestic economy from a global economic slowdown.
Amid the widespread market uncertainty, it would probably be safe for investors to pick gold stocks which are considered safe haven as they can maintain or increase in value during market turmoil.
We have employed our proprietary Zacks Investment Research
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