Wednesday May 24th

24-05-2017

US stock futures rise after OPEC extends production cuts

U.S. stock index futures pointed to a higher open on Thursday as oil-producing nations agree to extend production cuts for nine months. This comes as the group seeks to curb a global supply overhang which has depressed prices and revenues over the past three years. The proposed cuts are expected to be shared again by non-OPEC producers later on Thursday. Led by Russia, non-OPEC producers had initially curbed output in conjunction with OPEC in a landmark deal for the first half of the year from January. Nevertheless, U.S. crude prices fell more than 1.5 percent to $50.53 a barrel. Dow futures rose nearly 70 points, while S&P and Nasdaq futures advanced 6 points and 19 points. Elsewhere on Thursday, Fed Governor Lael Brainard and St. Louis Fed President James Bullard are due to speak at separate engagements. This comes after the U.S. central bank released minutes from its May meeting Wednesday, which showed that Fed officials seemed to be in sync with how they hope to reduce their $4.5 trillion balance sheet. Fed watchers have showed concern that if the process of unwinding the balance sheet isn't done correctly, this could not only be disruptive but also drive rates up unexpectedly. Analysts are currently pricing in the next rate hike to take place at the Fed's next meeting in June. Sticking with the U.S., investors will also be keeping a watchful eye on Donald Trump's first trip abroad as President, as the U.S. leader continues his visit through Europe on Thursday, meeting EU and NATO leaders in Brussels. During this visit, Trump is expected to discuss topics such as defense and environmental issues. Elsewhere, jobless claims hit 234,000 last week, rising slightly from the previous week, but remained near their lowest levels in more than 40 years. The Kansas City Fed Manufacturing Survey is also due out at 11:00 a.m. ET. Overseas, bourses in Europe were trading slightly lower, while markets in the Asia-Pacific region finished their trading session in positive territory. The Nikkei 225 gained 0.36 percent or 70.15 points to close at 19,813.13 while South Korea's benchmark Kospi index surged 1.1 percent or 25.59 percent to end the session at 2.342.93. Down Under, the ASX 200 closed in the green, edging higher by 0.36 percent or 20.625 points to finish at 5,78936. Markets in greater China were were higher a day after Moody's downgraded the credit rating of the world's second largest economy. Hong Kong's Hang Seng Index was up 0.6 percent while the mainland Chinese markets reversed earlier losses to close higher. The Shanghai Composite jumped 1.43 percent or 43.7971 points to close at 3,107.873 while the Shenzhen Composite ended trade higher by 0.725 percent or 13.0341 points at 1,811.9033. Gold held steady on Thursday as the dollar weakened after minutes from a U.S. Federal Reserve meeting suggested that the central bank could take a more cautious approach to interest rate increases. Spot gold inched up 0.01 percent to $1,258.26 an ounce. U.S. gold futures were up 0.39 percent at $1,258.