Friday August 17th

17-08-2018

US stock futures slip after yesterday's strong rally

U.S. stock index futures came under pressure ahead of Friday's open, following a positive session seen the previous day. Around 7 a.m. ET, Dow Jones Industrial Average futures slipped 32 points, indicating a relatively flat open for the 30-stock index. S&P 500 and Nasdaq 100 futures also pointed to flat start to the day. Markets in Europe and Asia pointed in different directions on Friday, helping sway U.S. futures, following positive trade developments between the U.S. and China. A strong session Thursday from Wall Street, which saw the Dow post its biggest jump since April, also offered a slight boost to market sentiment. On Thursday, National Economic Council Director Larry Kudlow confirmed earlier reports to CNBC which stated that China and the U.S. would hold a fresh round of trade discussions later on this month. Consequently, investors have shown optimism on the back of the news, that two of the world's largest economies could potentially resolve their differences in the ongoing trade dispute. While China has said that it welcomes dialogue between the two countries, it did however caution that it wouldn't consent to any unilateral actions concerning trade with the States. The move comes after months of rising tensions between both economies, where each country has retaliated with counter-measures, after the other nation inflicted a new amount of levies on goods. Concern in markets has risen of late, as investors worry that an escalation in trade fears could trigger to an economic slowdown worldwide and lower corporate profits. Elsewhere, investors will be keeping a close eye on the moves in the Turkish lira, after it tumbled in recent trading sessions. Markets have been jittery of late over concerns surrounding the Turkish president's control of the economy and U.S. leader Donald Trump saying last week that he was in support of doubling metal tariffs on the country. Aside from political developments keeping investors busy, a fresh cluster of data is due out on Friday. At 10 a.m. ET, consumer sentiment for August is scheduled to come out, along with leading economic indicators and the Advance Quarterly Services Report, that measures the performance of the U.S. service economy, for the second quarter. Meantime, while no speeches by the U.S. Federal Reserve are scheduled for today, investors will be gearing up for a special central banking event next week: the Economic Symposium at Jackson Hole, Wyoming which will take place from next Thursday to Saturday. This year's symposium will be on the topic of changing market structure and the implications for monetary policy going forward. Asia markets largely advanced on Friday, following a strong lead in from Wall Street and positive news on the U.S.-China trade front. The Nikkei 225 traded up by 0.35 percent, 78.34 points, to close at 22,270.38. Most major sectors in Japan rose, with the shipping sector leading the way — closing up by 2.44 percent. In South Korea, the Kospi rose by 0.28 percent to close at 2,247.05, with the tech industry and the auto sector mostly down. In the Greater China region, markets were mixed after beginning their trading day in positive territory. The Hang Seng Index traded 0.11 percent up with the most sectors in mixed territory as of 3:05 p.m. On the mainland, the Shanghai Composite fell by 1.33 percent to close at 2,669.10. Oil prices dipped on Friday, with U.S. crude heading for a seventh weekly decline amid increasing concerns about slowing global economic growth that could hit demand for petroleum products as inventories build. Brent crude oil futures were down 9 cents at $71.34 a barrel by 0649 GMT. U.S. West Texas Intermediate (WTI) crude futures dropped 5 cents to $65.41 a barrel. Brent is heading for a 2 percent decline this week, a third consecutive weekly drop. WTI is on track for a seventh week of losses, with a fall of more than 3 percent. Gold recovered some ground on Friday as a weakening of the dollar relieved pressure on prices, but the metal remained near 19-month lows and looked set for its biggest weekly fall since May 2017. Gold has tumbled 14 percent from its April high as a rally in the greenback made dollar-priced bullion more expensive for buyers with other currencies. Spot gold was up 0.2 percent at $1,175.89 an ounce at 1016 GMT but down 2.9 percent this week in its sixth consecutive weekly loss. On Thursday it touched $1,159.96, the lowest since January 2017. U.S. gold futures were 0.1 percent lower at $1,182.30 an ounce.