Monday March 18th

18-03-2019

Dow futures under pressure again as Boeing shares drop on FAA probe

U.S. stock index futures were mixed on Monday morning, with the Dow Jones Industrial Average under renewed pressure by a drop in shares of Boeing. Dow futures were down 51 points, indicating a slip of 30.87 points at the open. S&P 500 and Nasdaq 100 futures indicated a higher open, however. Boeing shares dropped 3 percent in the premarket after the U.S. Department of Transportation launched an investigation into whether there were lapses in the Federal Aviation Administration's approval of Boeing planes involved in two recent fatal crashes, The Wall Street Journal reported on Sunday. Investors are also awaiting the start of a two-day Federal Reserve policy meeting this week. The U.S. central bank will begin its meeting on interest rates on Tuesday, which ends with a news conference on Wednesday. The Federal Reserve is expected to lower their interest rate forecasts — or "dot plots" — to show little or no further tightening in 2019. There's also a strong focus on a potential trade deal between the United States and China. The Chinese Vice Premier, Liu He, spoke via telephone with U.S. Treasury Secretary Steven Mnuchin and U.S. Trade Representative Robert Lighthizer recently after a report in the South China Morning Post suggested that the two sides have made further progress. Optimism regarding a potential U.S.-China trade deal boosted the stock market on Friday. There is also strong attention on oil markets and an OPEC meeting. Russia's energy minister Alexander Novak told CNBC over the weekend that his country will be fully compliant with OPEC-led supply cuts in the coming weeks. Market participants are likely to monitor a fresh round of U.S. housing data. The National Association of Home Builders will release its monthly housing market survey at 10 a.m. ET. Major Asian stock markets closed higher on Monday as investors awaited developments on the U.S.-China trade front.The U.S. Federal Reserve was also set to begin its March policy meeting later in the week. Mainland Chinese shares advanced on the day, as the Shanghai composite jumped 2.47 percent to close at 3,096.42 and the Shenzhen component gained 3.067 percent to finish at 9,843.43. The Shenzhen composite also added 2.706 percent to close at 1,685.79. Hong Kong's Hang Seng index rose around 1 percent in its final hour of trading. The Nikkei 225 in Japan rose 0.62 percent to close at 21,584.50 as shares of index heavyweights Fast Retailing. The Topix index also added 0.69 percent to finish at 1,613.68. Over in South Korea, the Kospi closed 0.16 percent higher at 2,179.49. Oil slipped to around $67 a barrel on Monday, weighed by concern that an economic downturn may dent fuel consumption, despite the prospect of prolonged OPEC-led oil supply curbs. Japan's exports fell for a third month in February and U.S. manufacturing output fell. Analysts at Bernstein Energy said on Monday that while they expect oil demand to rise by 1.3 million barrels per day (bpd) in 2019, a global slowdown could limit growth to below 1 million bpd. Brent crude, the global benchmark, fell 26 cents to $66.90 a barrel at 1025 GMT. It reached a 2019 high of $68.14 last week. U.S. West Texas Intermediate crude was down 37 cents at $58.15. Gold prices edged up on Monday as expectations the U.S. Federal Reserve will be accommodative for the rest of the year weighed on the dollar though increased risk appetite limited bullion's gains. Spot gold was up 0.3 percent at $1,304.81 per ounce by 1031 GMT. U.S. gold futures gained 0.2 percent to $1,305.