Wednesday October 10th

10-10-2018

US stock futures fluctuate as investors keep a close eye on bond yields

U.S. stock-index futures fluctuated ahead of Wednesday's open as investors kept an eye on interest rates. Around 7 a.m. ET, Dow Jones Industrial Average futures fell 9 points, but indicated a gain of 29.43 points at the open. S&P 500 futures pointed to a slight gain while Nasdaq 100 futures indicated a small loss at the open. Investors in the U.S. will be monitoring the bond market today. In the previous session, the benchmark 10-year Treasury yield fell slightly after notching a fresh seven-year high earlier on in the trading day. The 30-year bond yield also reached its highest point since 2014. On Wednesday, bond yields continue to tick higher. Concerns surrounding rising interest rates continue to keep investors on edge, as market participants debate what this could mean for the domestic economy and monetary policy going forward. Meanwhile, mortgage applications fell 1.7 percent last week following the move up in interest rates. Other data set for release Wednesday include the producer price index (PPI) and wholesale trade. The wholesale cost of U.S. goods and services snapped back in September, but the level of inflationary pressure appears to have eased, at least temporarily. The producer price index climbed 0.2% last month, springing back from the first decline in a year and a half, the Labor Department said Wednesday. The increase matched the forecast of economists polled by MarketWatch. The increase in wholesale inflation over the past year, however, slowed again to 2.6% from 2.8%. The 12-month rate hit a seven-year high of 3.4% just four months ago. Elsewhere, investors will be bracing for any news out of the political sphere, as the midterm elections – due in November – draw closer. On the corporate front, Fastenal is set to publish its latest earnings results. Stocks in Asia saw broad gains on Wednesday. In Japan, the Nikkei 225 bounced back to close higher by 0.16 percent at 23,506.04 after being in largely flat territory earlier, while the Topix also ended the trading day up by 0.16 percent at 1,763.86, with most sectors seeing gains. In the Greater China region, the Hang Seng index in Hong Kong saw a slight gain to close at 26,193.07. Over on the mainland, the Shanghai composite saw a rebound, advancing by 0.18 percent to close at around 2,725.84. The Shenzhen composite, on the other hand, declined by 0.147 percent to end the trading day at about 1,383.05. South Korea's Kospi also closed lower, slipping by 1.12 percent at 2,228.61. Oil prices edged lower on Wednesday after the IMF lowered its global growth forecasts but prices were supported as Hurricane Michael churned towards Florida, causing the shutdown of nearly 40 percent of U.S. Gulf of Mexico crude output. Brent crude futures were down 21 cents at $84.79 a barrel by 0434 GMT, after a 1.3 percent gain on Tuesday. U.S. West Texas Intermediate (WTI) crude was down by 34 cents, or 0.5 percent, at $74.62 a barrel, after rising nearly 1 percent in the previous session. Gold prices held steady on Wednesday as expectations of more U.S. interest rate increases pressured demand, although the metal drew some support from the dollar coming off a seven-week high. Spot gold was little changed at $1,189.05 an ounce at 0513 GMT, moving largely within a slim $3 range during the session. U.S. gold futures rose 0.1 percent to $1,193.20 an ounce.