Modest Open Likely For US Markets: Oil Price Up

Moderate open likely for Wall Street Tuesday as important U.S. stock index futures indexes were slightly down Tuesday morning.

At 05:00 a.m. ET, Dow Jones futures fell 47 points hinting a lower open of above 40 points. Futures on the S&P and Nasdaq were also slightly down.

The U.S market's focus fully turned to the Fed meeting starting Tuesday. Expectations are peaking that a quarter-point rate cut is likely to happen on Wednesday.

But President Donald Trump stated that a small rate cut “is not enough.”

The U.S. and Chinese negotiators are restarting the deadlocked trade talks Wednesday after the truce agreed at the G20 meeting in June.

Trump thinks China may not want to sign a trade deal and will wait until the 2020 U.S. election gets over.

On the data front, personal and consumer spending figures will be released at 08:30 a.m. ET.

Pending home sales and consumer confidence numbers will come out at 10:00 a.m. ET.

In the corporate news, Mastercard, Under Armour, and Mondelez will report their latest quarterly earnings results.

Apple Q2 results coming after the bell is keenly awaited.

Oil price jumps

Oil prices jumped on Tuesday buoyed by the optimism that the U.S. Federal Reserve will cut interest rates and support economic and fuel demand growth in the world’s biggest oil user.

Brent crude rose 0.5 percent to $64.04 a barrel by 0435 GMT. The U.S. crude at WTI was up 0.5 percent at $57.17 a barrel.

If the U.S. central bank reduces interest rates, that would “support a continuation in global expansionary activities and fuel demand growth” for the second half of 2019, commented Benjamin Lu, an analyst at Phillip Futures in Singapore in a note.

However, demand-side concerns will continue to cast a shadow on oil prices, he added.

Tensions in the Middle East have slightly ebbed but the scope of disruption and escalation continues to be high.

Asian stocks up

Stocks in the Asia Pacific moved up Tuesday as investors awaited for good news from the U.S.-China trade talks in Shanghai. In the region, the Bank of Japan decided to keep monetary policy steady.

Japan’s Nikkei 225 rose 0.43 percent while the Topix index added 0.45 percent. In mainland China, the Shanghai Composite jumped 0.39 percent.

Hong Kong’s Hang Seng index pared losses from Monday to bounce back in early trade and the index added 0.24 percent at the final hour of trading.

South Korea’s Kospi rose 0.45 percent while Australia’s ASX 200 gained 0.28 percent.

Indian shares were up Tuesday. The positive open stemmed from an expected rate cut by the U.S. Federal Reserve.

The NSE Nifty jumped up 0.32 percent as of 0455 GMT/12.55 ET. The benchmark BSE Sensex jumped 0.31 percent. The gains were led by banks and financials.

“The positive open follows mildly positive U.S. markets on Monday and largely positive Asian markets this morning,” commented Deepak Jasani, senior VP at HDFC Securities.

In Europe, pan- European Stoxx 600 was down 0.9 percent by mid-morning. The British pound slumped to a 28-month low on Monday after market fears increased that the U.K. would leave the European Union without a deal.

Gold slips

Gold prices slipped on Tuesday as the dollar stayed near two-month highs as hopes of an aggressive rate cut waned from the Federal Reserve policy meeting.

Spot gold was down 0.1 percent at $1,425.11 per ounce as of 0427 GMT. The U.S. gold futures rose 0.3 percent to $1,424.30 per ounce.

“Liquidity is still thin as traders seemed to be holding back before the Fed gives its views on monetary policy,” said Benjamin Lu, an analyst at Phillip Futures. But he added there is the reason to be bullish on gold.