Tuesday August 16th

16-08-2016

Wall Street set for pause; earnings, data set to take spotlight

Despite posting record highs on Monday, U.S. stock index futures pointed to a lower open on Wall Street Tuesday, following the weaker trade seen across its European and Asian counterparts. Earnings and economic data are set to take center stage on Tuesday, with Urban Outfitters and Popeyes Louisiana Kitchen expected to release their latest earnings reports. Home Depot posted earnings that matched estimates. Meanwhile, Dick's Sporting Goods shares rose more than 5 percent in the premarket after reporting quarterly results. Investors digested the July consumer price index (CPI) read, which came in unchanged, in line with expectations. Housing starts, on the other hand, came in higher than expected. Industrial production and capacity utilization are also expected, set to come out at 9.15 a.m. ET. Weaker sentiment across the globe is expected to weigh on U.S. stocks, with European indexes posting solid losses during trade, while Asia-Pacific indexes traded mostly lower overnight, as the U.S.' impressive close on Monday failed to lift sentiment. On Monday, all three of the U.S.' major indexes posted simultaneous record closes for the second time in less than a week. In addition, investors are looking ahead to Wednesday, where the Federal Open Market Committee is set to release its minutes from its July meeting; with Atlanta Federal Reserve President, Dennis Lockhart, expected to speak on Tuesday, ahead of that announcement. Wall Street's fresh record closing highs failed to boost sentiment in Asia markets on Tuesday, with Japanese shares selling off as the yen surged. The benchmark Nikkei 225 fell 273.05 points, or 1.62 percent, to 16,596.51, while the broader Topix dropped 18.16 points, or 1.38 percent, to 1,298.47. In South Korea, the Kospi returned to trading after being shut on Monday for a public holiday, with the index finishing down 2.71 points, or 0.13 percent, at 2,047.76. In Hong Kong, the Hang Seng index was flat at 22,937 in late afternoon trade. Chinese mainland markets were mixed, with the Shanghai composite closing down 14.71 points, or 0.47 percent, at 3,110.47, while the Shenzhen composite gained 13.56 points, or 0.67 percent, to 2,036.80. Oil prices gave up gains to trade negative after U.S. economic data showed consumer prices were unchanged in July as the cost of gasoline fell for the first time in five months and underlying inflation moderated. The data could further diminish prospects of a Federal Reserve interest rate increase this year. Futures had earlier reversed overnight losses to trade near five-week highs, fueled by talk of producers taking action to prop up the market, although some investors cashed in during Asian hours on the 16 percent rally since early August. Brent crude futures fell 21 cents at $48.14 per barrel at 8:53 a.m. ET (1253 GMT). The benchmark is up more than 14 percent from the $41.51 low for the month on Aug. 2. U.S. West Texas Intermediate crude was trading at $45.54 a barrel, down 20 cents  from its previous close, but still more than 15 percent above its $39.19 monthly low from Aug. 3. Gold rose around 1 percent on Tuesday as a series of lower-than-expected U.S. economic data weighed on the dollar and reduced prospects for a Federal Reserve interest rate hike this year. Spot gold rose 0.8 percent at $1,349.99. U.S. gold rose 0.6 percent to $1,355.70 an ounce. Spot gold was within reach of a more than two-year high of $1,374.91 hit last month as investors sought refuge from volatility across financial markets following Britain's vote to leave the European Union.