Higher Open Likely For US Markets: Oil Price Down

Higher open likely for Wall Street Thursday after U.S. stock index futures looked higher on Thursday morning.

Market sentiments jumped after China’s reported comments came expressing the intent to solve the trade war "calmly."

At 7:10 a.m. ET, Dow Jones futures jumped 263 points, showing a positive open of 274 points and above. Futures on the S&P and Nasdaq were also high.

The comments of China’s commerce ministry that it was against escalating trade tensions soothed investor concerns.

Exacerbating investor worries was the yield curve inversion as a recession indicator in the last few days.

On Wednesday, the spread between the 10-year Treasury yield and the 2-year rate had fallen to negative 6 basis points setting off a panic.

On the trade front, the Trump administration’s enhanced tariffs on $300 billion worth Chinese imports, at 15 percent will become effective Sept. 1 and Dec. 15.

On the data front, Thursday will see many releases. The latest weekly jobless claims, second-quarter GDP data and advance economic indicators for July will be out by 8:30 a.m.

Pending home sales data for July will also follow.

In quarterly results, Toronto-Dominion Bank, Best Buy and Dollar General are companies that will report earnings before the bell.

Dell, Marvell Tech and Workday will release quarterly results after the market close.

European markets reversed losses Thursday morning after soft inflation data ramped up expectations that the ECB (European Central Bank) would inject stimulus into the economy by September.

The pan- European Stoxx 600 climbed 0.4 percent in early trade.

Oil price falls

Oil prices fell on Thursday after a jump on Wednesday. San Francisco Federal Reserve President Mary Daly’s comments about the strength of the U.S. economy sounded like a note of concern.

Brent crude fell 0.5 percent at $60.18 a barrel by 0638 GMT while U.S. crude fell 0.3 percent at $55.60 a barrel.

Oil prices had jumped 1.5 percent in the previous session.

Concerns that the global economic slowdown due to the trade war between the United States and China would hit oil demand blocked bigger expansion of oil prices.

Daly said she believes the U.S. economy is having a “strong” momentum but global slowdown and uncertainty are pounding it.

"The U.S. crude drawdown confirms that OPEC supply cuts are effectively working by depleting U.S. reserves,” said Stephen Innes, managing partner at Valour Markets.

Asian markets mixed

In stock market news, mixed trends in Asian stock markets on Thursday looked prominent.

Investors tracked the developments in the U.S bond markets and yield curve changes which inverted overnight triggering recession concerns.

Mainland Chinese fell on Thursday. The Shanghai composite slipped 0.1 percent.

Hong Kong’s Hang Seng index jumped 0.28 percent at its final hour of trading.

The Chinese yuan briefly weakened to a level not seen in more than 11 years.

Japan’s Nikkei 225 closed slightly lower while the Topix finished largely flat. South Korea’s Kospi was down 0.4 percent while Australia’s ASX 200 was up 0.1 percent.

Indian shares traded lower on Thursday. The 30-share BSE Sensex fell 1 percent while NSE Nifty50 slipped 0.89 percent.

Gold price up

Gold prices were up Thursday as recession fears thrashed risk sentiment.

Spot gold rose 0.3 percent to $1,542.77 per ounce, as of 0754 GMT. The U.S. gold futures jumped 0.2 percent at $1,552.70 an ounce.

“Gold is taking strength from the impression that trade attitudes are hardening,” said Nicholas Frappell, global general manager at ABC Bullion.

The positive outlook on the gold price is also backed by the confidence of markets that a quarter-point cut in interest rates by the U.S. Fed is likely in September.