Tuesday November 23rd

24-11-2015

Wall Street under pressure ahead of GDP, consumer data

U.S. stock index futures indicated a lower open on Tuesday ahead of GDP and consumer confidence data, both of which are expected to show positive signs, which would help support the Federal Reserve's case for raising rates next month. Economists expect to see the 8:30 a.m. ET report of third quarter GDP to show an upward revision to 2.1 percent growth, from the original reading of 1.5 percent. Consumer confidence is expected to rise to 99.5 from 97.6, when it's reported at 10 a.m. ET. S&P/Case-Shiller home price data is released at 9 a.m. ET, and is expected to show a gain of 5.2 percent, up from 5.1 percent previously. The big number markets are waiting for is the November employment report due on December 4, after October's report of 271,000 nonfarm payrolls and a surprise pickup in wages. That report will have direct bearing on the Fed's rates decision on December 16. "The Fed was already promoting the idea of a December rate hike well ahead of that very strong October payroll report, thus the odds that lift-off begins at the upcoming meeting are extremely elevated. We noted weeks ago that the largest precondition to tighten in December would be the ability to get the market to 'buy in' to the idea of a hike," said chief U.S. economist at RBC Capital Markets, Tom Porcelli. "With market odds now sitting at roughly 75 percent that they go, it looks as though the committee has done its job from a communications standpoint," Porcelli added. Meanwhile, the markets are slowing down and preparing for holiday mode, with trading closed Thursday for the Thanksgiving holiday. Stocks Monday traded on the lowest volume in a month. Futures extended losses after news that Turkish military shot down a jet fighter along the Syrian border, after the plane violated Turkey's airspace. Oil prices saw some gains after the news and fluctuations will likely remain in focus Tuesday, after sharp moves were seen on Monday following comments from oil cartel OPEC's largest producing Saudi Arabia pledged to work towards oil price stability, sending prices up from session lows. Brent futures for January climbed 60 cents to $45.41 a barrel, while U.S. West Texas Intermediate (WTI) crude (WTI) crude was also up 56 cents at $42.29 a barrel, as strength in the dollar capped gains. The U.S. dollar index briefly hit 100 for the first time since March on Monday and continued to hold higher against major world currencies. Earnings reports are expected from Campbell Soup, Dollar Tree,Hormel Food, Tiffany , Cracker Barrel, Chico's FAS, Signet Jewelers, and Burlington Stores, ahead of the bell. Hewlett Packard reports after the bell, as does Guess and TiVo. European markets moved sharply lower on Tuesday following an uninspiring lead from Asia overnight and Wall Street Monday, increased concerns over the threat of terrorism, and continued pressure on commodity prices. Asian equity markets closed mixed on Tuesday afternoon, following a lower finish from Wall Street overnight on the back of fluctuating oil prices. Nikkei cuts back losses, finishes strongly near 20,000. The benchmark Nikkei 225 finished at a three-month high, cutting back early losses to close 45 points, or 0.23 percent, higher at 19,925. Gold and silver languished near their lowest level in six years on Tuesday, while platinum dipped to a seven-year low on a strong dollar and growing expectations that the Federal Reserve would increase U.S. interest rates next month. Outflows from exchange-traded funds backed by the metals, all non-interest-paying assets, as investors position for a rate hike are also hurting prices. Spot gold ticked up 0.1 percent to $1,070.30 an ounce by 0330 GMT, but not too far from last week's low of $1,064.95, the weakest since February 2010.