Wednesday August 3rd

3-08-2016

US futures hold lower after ADP report

U.S. stock index futures fell on Wednesday, following Asian and European markets lower as investors digested a slump in oil prices, disappointment over Japan's stimulus plan and private-sector employment data. Private job growth was a little better than expected in July, though all of the new positions came from the services sector, according to the latest report from ADP and Moody's Analytics. Companies added 179,000 positions for the month, topping Reuters estimates of 170,000. That was a slight increase from June, which saw an upwardly revised 176,000, 4,000 more than originally reported. Other data due Wednesday include the ISM services index for July, which follows a disappointing reading for ISM manufacturing on Monday. U.S. indexes closed lower on Tuesday as WTI oil futures settled below $40 per barrel for the first time since April and the Dow ended down for a seventh consecutive day. Light crude for September rose on Wednesday but remained under $40. Oil prices edged higher on Wednesday after hitting their lowest levels since April in the previous session, supported by an industry report showing a fall in U.S. inventories and a weaker dollar. But prices could struggle to make much headway, analysts said, as sentiment remains bearish. A supply glut that has weighed on prices could increase if oil exports restart from ports in Libya that have been closed since 2014. U.S. West Texas Intermediate (WTI) crude futures were up 34 cents at $39.85 per barrel at 8:08 a.m. ET (1208 GMT), after closing below $40 a barrel on Tuesday for the first time since April. International Brent crude rose 34 cents to $42.14 per barrel. It reached $41.51 on Tuesday, the lowest since April 18. There are several big earnings due on Wednesday Tesla Motors and Herbalife after the bell. Ahead of the open, Time Warner posted quarterly earnings that beat expectations. Japan announced a 13.5 trillion yen ($134 billion)-fiscal stimulus plan on Tuesday as part of an effort to boost its anemic economy. The size of the package disappointed some investors, particularly after a parallel monetary stimulus plan announced by the Bank of Japan on Friday also came in smaller than expected. "The Bank of Japan's announcement was certainly a damp squib setting in train uncomfortable adjustments in the financial markets and giving a further boost to the yen that will weigh on profits as well as prices," Chris Scicluna, head of economic research at Daiwa Capital Markets in a note on Wednesday. In Japan, the Nikkei 225 closed down 308.34 points, or 1.88 percent, at 16,083.11, its lowest finish in three weeks, while the Topix fell 28.22 points, or 2.17 percent, to 1,271.98. Across the Korean Strait, the Kospi slipped 24.24 points, or 1.2 percent, to 1,994.79. Australia's ASX 200 was off 74.83 points, or 1.35 percent, to 5,465.70, with the heavily-weighted financials sub-index selling off some 2 percent. In Hong Kong, markets re-opened after being shut on Tuesday due to a typhoon warning. The Hang Seng index fell 1.49 percent in late afternoon trade. Chinese mainland markets reversed early losses to close up, with the Shanghai composite adding 7.89 points, or 0.27 percent, to 2,979.17 and the Shenzhen composite gaining 8.12 points, or 0.42 percent, to 1,934.81. Gold was little changed on Wednesday, hovering close to a three-week high hit in the previous session, as the impact of lower European share markets was offset by a steadier dollar. Spot gold was down 0.3 percent at $1,370.90 an ounce. It hit $1,367.33, its highest since July 11, on Tuesday.