Tuesday August 9th

9-08-2016

Oil and OPEC eyed on Wall Street

U.S. stock index futures traded flat to higher on Tuesday as traders eyed oil prices and earnings season trailed off. Crude oil futures gained slightly on Tuesday as OPEC and non-OPEC countries are seen meeting shortly to discuss whether to prop up weak oil prices. "Oil prices are looking buoyant on fresh hopes that the upcoming OPEC meeting has the potential to curb oil supplies," Naeem Aslam, chief market analyst at Think Markets UK, said in a note on Tuesday. Oil fell trade at roughly $45 a barrel on Tuesday after rallying to a two-week high the previous day, as concern about a supply glut outweighed hopes of producer action to prop up prices. In the latest sign of ample supplies, market intelligence firm Genscape reported a rise of more than 307,000 barrels at the Cushing, Oklahoma delivery hub for U.S. crude, traders said. U.S. inventory reports are due on Tuesday and Wednesday. Brent crude for October was down 26 cents at $45.13 a barrel by 8:53 a.m. ET (1253 GMT), after rising $1.12 on Monday. The global benchmark fell nearly 15 percent in July. U.S. crude for September was down 15 cents at $42.87. Companies posting second-quarter earnings on Tuesday included Coach and Valeant Pharmaceuticals International, with Walt Disney due after the bell. In the U.S., wholesale inventories for June data are out on Tuesday. Second-quarter labor productivity fell 0.5 percent. The benchmark S&P 500 index hit a new intraday high on Monday before paring gains to close around 0.1 percent lower on the day. Dutch human resources services provider, Randstad Holding, announced it would buy Monster Worldwide on Tuesday for $3.40 per share in cash, with a total purchase price of around $429 million. Major Asian markets advanced on Tuesday, with sentiment likely underpinned by cooling Chinese inflation data helping to spur stimulus hopes, while the Reserve Bank of India kept its monetary policy steady. Australia's ASX 200 closed up 14.65 points, or 0.26 percent, at 5,552.50, with nearly 1 percent advances in the energy and financials sub-indexes. In Japan, the Nikkei 225 advanced 114.40 points, or 0.69 percent, to 16,764.97, while across the Korean Strait, the Kospi gained 12.66 points, or 0.62 percent, to 2,043.78. Chinese mainland markets closed higher, with the Shanghai composite up 21.63 points, or 0.72 percent, at 3,025.91, while the Shenzhen composite added 20.39 points, or 1.04 percent, to 1,982.66. In Hong Kong, shares bucked the trend, with the Hang Seng index trading down 0.21 percent in the late afternoon. Gold eased on Tuesday as speculation that the U.S. Federal Reserve could raise rates this year undermined interest in the metal, though uncertainty kept prices in a narrow range. CME Group's Fed Watch tool showed traders see almost a 50-50 chance of a U.S. rate hike by December, compared with 30 percent before a forecast-beating non-farm payrolls report on Friday last week. Gold is highly sensitive to rising U.S. interest rates, which lift the opportunity cost of holding non-yielding bullion, while boosting the dollar, in which the metal is priced. Spot gold was down 0.1 percent at $1,333.92 an ounce, while U.S. gold futures for December delivery were down $2 an ounce at $1,339.30. Spot gold touched a one-week low of $1,329.55 on Monday.