Lower Open Likely For Wall Street: Oil Price Up

Lower open likely for Wall Street on Thursday as the U.S. stock index futures were looking a bit negative on Thursday morning.

At 5:50 a.m. ET, Dow Jones futures hinted a negative open of about 40 points. Mixed signs were visible on futures at the S&P and Nasdaq indices.

Investors’ attention turned to the Federal Reserve’s central banking meeting in Jackson Hole, Wyoming, over the next two days.

The meeting and the concluding session to be addressed by Fed chief Jerome Powell will throw hints on the thinking over future rate cuts.

The central bank published its latest meeting minutes on Wednesday showing that Fed officials who voted to lower interest rates in late July wanted the move not be viewed as an autopilot for future cuts.

On data, the latest weekly jobless claims will be released at 8:30 a.m. ET. The manufacturing Purchasing Managers’ Index (PMI) and services PMI for August will also follow.

At the earnings front Hormel Foods, BJ’s Wholesale, and Dick’s Sporting Goods will report earnings before the opening bell. The latest quarterly results of Salesforce.com, Gap, and HP will come at the market close.

The European stocks were down Thursday after the 2-year-10-year U.S. yield curve inverted for the second time in two weeks. The pan-European Stoxx 600 fell 0.4 percent in early trade on Thursday.

Oil price up

Oil prices were up on Thursday after data showed a heavy drawdown in U.S. crude inventories.

However, looming concerns over the global economy and a build-up in U.S. refined product stocks controlled a drastic gain on prices.

Brent crude futures jumped 0.1 percent to $60.36 a barrel by 0242 GMT on Thursday. West Texas Intermediate (WTI) crude futures increased by 0.2 percent to $55.78 per barrel.

“Amid mounting market concerns about a slowdown in economic and oil demand growth, it might be a surprise that crude oil inventories have been plunging,” commented analysis firm Kayrros.

Oil markets were also supported by recurring tensions between the United States and Iran.

On Wednesday, Iranian President Hassan Rouhani cautioned the U. S against heightening pressure on Tehran. He warned that if the oil exports of Iran are sought to be cut to zero, then international waterways will not be safe as before.

Asian markets mixed

The stock market news showed Asia markets as a mixed platter; mainland Chinese markets were on a recovery path from the previous lows.

The Shanghai Composite was up 0.11 percent. Hong Kong’s Hang Seng index was down 0.82 percent. Singapore’s Straits Times index jumped 0.18 percent. The Jakarta Composite fell 0.11 percent.

Japanese shares were mixed after data showed its manufacturing activity fell for a fourth straight month in August.

Japan’s benchmark Nikkei 225 closed fractionally higher while the Topix index gained 0.04 percent.

South Korea’s Kospi fell 0.69 percent while Australia’s ASX 200 added 0.29 percent.

Indian shares closed lower by more than 1.5 percent on Thursday after investors’ awaited news on fiscal stimulus and clues from the upcoming speech of U.S. Fed chairman.

The benchmark BSE Sensex 30 closed 587 points down while the broader NSE Nifty50 index shed 177 points. The slump in rupee also added to the decline.

Gold price flat

Gold prices were flat on Thursday, holding above the key $ 1,500-ounce level.

Investors are awaiting signals from the Fed chair’s speech at a global central bankers’ conclave for clues on future U.S. interest rate cuts.

Spot gold slipped 0.1 percent to $1,500.14 per ounce by 0426 GMT. The U.S. gold futures fell 0.4 percent at $1,510.10 an ounce.

If Powell says rates will be cut aggressively, then that may not be good for gold in the short-term because equities will gain, noted an analyst.