Thursday August 20th

20-08-2015

Wall Street set to open lower due to lower oil prices

U.S. stock index futures indicated a sharply lower open on Thursday, with Dow futures down as much as 160 points, as oil prices extended losses and investors digested Wednesday's Fed minutes and more volatility in Chinese markets. Wednesday's Fed minutes left the markets wanting, with enough nuance to keep Wall Street divided over whether the first rate hike comes in September or later. That means the scrutiny of each piece of data, and particularly job-related or inflation data, will be intense. Initial claims data came in at 277,000, but remained consistent with an improving labor market trend that could support a rate hike this year. The U.S. 2-year Treasury note yield held higher near 0.67 percent, while the 10-year yield trimmed losses to trade near 2.11 percent. The U.S. dollar traded slightly lower against major world currencies, with the euro above $1.11. Existing home sales, the Philadelphia Fed survey and leading indicators are all released at 10 a.m. ET. The Philly Fed survey will be key, after the Empire State survey earlier in the week plunged to a 2009 low. Traders were also keeping an eye on a range of U.S. jobs data and China's continuing rollercoaster ride, with the benchmark Shanghai Composite closing 3.4 percent lower, down 128.53 points. On the earnings front, Madison Square Garden, Sears Holdings and The Buckle were scheduled to report before the bell. Hewlett Packard, Gap, Intuit, Marvell Tech, Ross Stores, Salesforce.com and Fresh Market are all due after the bell. In Europe, the pan-European Stoxx 600 index was 1.3 percent lower, with investors taking in the latest Fed minutes and concerns over Chinese growth continuing. The sell-off in Asian stocks continued on Thursday, with some bourses hitting multi-month lows, as whirlwind rides in mainland equity markets brought worries surrounding the world's second-largest economy back to the fore. Nikkei drops 0.9%. Japan's Nikkei 225 widened losses near the close to finish at the index's lowest level since July 13. U.S. crude oil prices fell to almost $40 a barrel on Thursday, its lowest since the global financial crisis of 2009, as supplies rose in North America and the Middle East, filling stockpiles to record levels. U.S. crude oil, also known as West Texas Intermediate or WTI , was down 26 cents at $40.54 a barrel shortly before 8:15 a.m. EDT (1215 GMT), after hitting a new 6½-year low of $40.21. Brent crude futures, the global benchmark oil price, were down 59 cents at $46.57 a barrel, still some way off their 2015 low of $45.19 traded in January. Gold hit its highest in nearly five weeks on Thursday after meeting minutes from the U.S. Federal Reserve suggested policymakers were in no hurry to raise interest rates. Spot gold hit a high of $1,141.75 an ounce, its highest since July 17, and was up 0.4 percent at $1,138.50 as of 1059 GMT. U.S. gold for December delivery was up 0.93 percent to$1,138.40 an ounce. Spot gold has recovered nearly 6 percent from a 5-1/2-year low of $1,077 hit in a late July rout, when investors cut their exposure on fears of further price declines.