Wednesday September 7th

7-09-2016

Fed’s Beige Book, oil set to take center stage on Wall Street, earnings eyed

U.S. stock index futures pointed to a flat open on Wednesday, as investors gear up for another set of important economic releases and earnings, all the time keeping an eye on oil. Oil continues to keep investors on their toes in recent trading sessions, as investors debate whether leading oil producers will take significant action to curb the current supply glut seen in the oil market. Crude futures have risen in previous days following news that Saudi Arabia and Russia had agreed to cooperate on stabilizing the market. Oil futures slipped on Wednesday, with U.S. crude trading lower, last standing around $44.75 per barrel. Brent was hovering around $47.20. On the data front, mortgage applications rose 0.9 percent last week. Other data due Wednesday include the Job Openings and Labor Turnover Survey (JOLTS) at 10.00 a.m. ET. In addition, the U.S. Federal Reserve is expected to release its Beige Book on Wednesday, due out at 2.00 p.m. ET. The Fed has been front and center as of late, with investors pondering over when the central bank will decide to raise interest rates. Recent data including ISM non-manufacturing and the nonfarm payroll data for August have come in below market expectations, suggesting that the Fed is less likely to raise rates this month. When it comes to earnings, Hewlett Packard Enterprise, Francesca's, ABM Industries and Verint Systems are set to report on Wednesday. DAVIDsTEA is also expected to release its latest earnings. HD Supply Holdings and Malibu Boats posted results before the bell. European stocks were mixed, while Asia-Pacific indexes finished mostly mixed overnight. Japan's Nikkei 225 finished down 0.41 percent, or 69.54 points, at 17,012.44 as the yen strengthened against the dollar. A stronger yen is generally seen as negative for Japanese stocks as it makes exports more expensive and reduces overseas earnings when translated back into the home currency. Chinese mainland markets were mixed, with the Shanghai composite closing nearly flat at 3,092.406 and the Shenzhen composite finishing lower by 0.178 percent, or 3.637 points, at 2,044.553. In Hong Kong, the Hang Seng index was down 0.24 percent by afternoon trade. South Korea's benchmark Kospi finished lower by 0.23 percent, or 6.65 points, at 2,061.88. On Tuesday, U.S. stocks closed higher, despite the weak ISM non-manufacturing data. Gold steadied near two-and-a-half-week highs on Wednesday, losing momentum due to profit taking following a rally in the previous session on U.S. data that weakened the case for a U.S. rate rise soon. Gold is highly exposed to interest rates and returns on other assets, as rising rates lift the opportunity cost of holding non-yielding bullion. Spot gold was down 0.2 percent at $1,347.21 per ounce. The metal touched a high of $1,352.65, its best since Aug. 19 and is up about 1.7 percent so far this week. U.S. gold futures were down $2.20 at $1,351.80 per ounce.