Wednesday March 14th

14-03-2018

US stocks set for a positive open as political concerns linger

U.S. stock index futures posted gains ahead of Wednesday's open, as investors tried to shake off domestic political concerns. Around 7:50 a.m. ET, Dow futures were up 97 points, indicating a rise of 110.97 points at the open. The Nasdaq and the S&P 500 futures also indicated a positive open for their respective markets. The pre-market moves come after a choppy trading day Tuesday, with the Dow Jones industrial average closing down more than 150 points, the index's worst session in nearly two weeks. Markets remained on edge Wednesday, with concerns over trade tensions and upheaval in the White House. Last week, President Donald Trump signed two declarations to impose tariffs on steel and aluminum imports — both are expected to take effect in the coming weeks. While Canada and Mexico are exempt from the deal, fears over a potential trade war remain, as investors worry that countries around the world may impose their own retaliatory tariffs. A source told CNBC on Tuesday that Washington is contemplating a trade package that would include investment restrictions, indefinite tariffs and potentially even visa restrictions on Chinese travelers. Asian equities were down, with the Nikkei 225 falling 0.8 percent and the Shanghai composite dropping 0.5 percent. Over in Seoul, the benchmark Kospi edged down by 0.34 percent to end at 2,486.08. Greater China markets traded lower as markets focused on a potential elevation in trade tensions. Hong Kong's Hang Seng Index tumbled 1.37 percent by 3:15 p.m. HK/SIN as the heavily weighted financials and technology sectors logged losses. In Europe, the Stoxx Europe 600 rose 0.3 percent as corporate news helped lift the major indexes. German apparel company Adidas climbed more than 9 percent after it revised upward its long-term profit target and said it would propose a higher dividend. Investors will also be reflecting on Trump's decision to fire Secretary of State Rex Tillerson, followed by the announcement that he would nominate CIA Director Mike Pompeo as Tillerson's replacement. Yields on 10-year Treasurys fell to 2.846 percent Wednesday in New York, their lowest level since early March. Yields move inversely to prices. Shares of Qualcomm rose slightly in premarket trading Wednesday after Broadcom announced that it is formally ending its hostile bid for the American chipmaker. Qualcomm stock fell nearly 5 percent Tuesday after President Trump ordered Broadcom to abandon the deal. Oil edged up on Wednesday as strong Chinese factory activity encouraged investor inflows into industrial commodities such as copper, although fast-growing U.S. crude output tempered price gains. China reported a 7.2 percent year-on-year increase in industrial output in the first two months of the year, roundly beating expectations and, in a dose of support for oil bulls, the data showed crude production fell 1.9 percent. Copper and palladium, a key component in gasoline-powered vehicles, both rose around 1 percent, which in turn encouraged a bounce in the oil price. Brent crude was last up 27 cents at $64.92 a barrel, off an earlier low of $64.43, while U.S. West Texas Intermediate (WTI) futures were up 31 cents at $61.02 a barrel. "We've seen copper breach above $7,000 (a tonne) ... and I think a lot of this is coming out of this really big beat in the Chinese industrial production, so general macro flows, I would say, are reinforcing that bullish narrative," ING commodities strategist Oliver Nugent said. Gold prices were flat on Wednesday, hovering near a one-week high on a weaker dollar following U.S. Secretary of State Rex Tillerson's sudden dismissal, which invigorated concerns of protectionist policies hampering global risk appetite. Spot gold was unchanged at $1,325.93 per ounce at 0735 GMT. It touched $1,330.02 an ounce during the session, its highest since March 7. U.S. gold futures for April delivery fell 0.1 percent to $1,326.30 per ounce. In economic data, U.S. producer prices increased slightly more than expected in February. The Department of Labor said on Wednesday that its producer price index rose 0.2 percent last month; economists polled by Reuters had expected PPI gaining 0.1 percent. So-called core PPI — which excludes volatile food, energy and trade service prices — rose 0.4 percent. The Commerce Department said retail sales declined for a third straight month on Wednesday as households curbed purchases of cars and other expensive items. Economists had been expecting sales to rise 0.3 percent.