Wednesday July 3rd

3-07-2019

Dow futures rise on expectations for the Fed to lower rates this month

U.S. stock index futures rose slightly on Wednesday as investors bet on a potential rate cut from the Federal Reserve later this month after the release of weaker-than-expected economic data. Around 8:20 a.m. ET, Dow Jones Industrial Average futures indicated a gain of more than 60 points at the open. Futures on the S&P 500 and Nasdaq 100 also rose. Wednesday’s session ends at 1 p.m. ET due to the Fourth of July holiday. Private payrolls in the U.S. increased by 102,000 in June, ADP and Moody’s Analytics said. Economists polled by Dow Jones expected growth of 135,000. The disappointing data strengthens the Fed’s case for lowering rates at its monetary policy meeting at the end of July. Last month, the central bank opened the door to easier monetary policy by stating it will “act as appropriate” to maintain the current economic expansion. Wall Street got off to a strong start this week following a trade truce between the two world’s two largest economies. The U.S. and China agreed to restart trade talks over the weekend, after President Donald Trump offered concessions — including no new charges and an easing of restrictions on tech company Huawei — to soothe tensions with Beijing. However, the initial enthusiasm over the latest trade truce between Washington and Beijing has since been overtaken by intensifying concerns over the Trump administration’s threat of tariffs on additional European goods. The U.S. Trade Representative’s office released a list of products — including olives, Italian cheese, and Scotch whiskey — that could be hit with new levies in addition to those introduced in April. It comes after the U.S. government threatened to impose tariffs on $4 billion worth of EU goods on Monday, as part of a long-running dispute over aircraft subsidies. In corporate news, Tesla shares jumped more than 7% after the auto maker reported record delivery and production numbers. Major Asian markets declined on Wednesday as global trade concerns weighed on investor sentiment. The Nikkei 225 slipped 0.53% to close at 21,638.16, while the Topix fell 0.65% to end its trading day at 1,579.54. In mainland China, the Shanghai composite was lower by 0.94% to close at 3,015.26 and the Shenzhen component shed 1.32% to 9,419.84. The Shenzhen composite fell 1.18% to close at 1,600.02. Meanwhile, South Korea’s Kospi also declined 1.23% to close at 2,096.02. Hong Kong’s Hang Seng index slipped more than 0.2%, as of its final hour of trading. Oil prices rebounded slightly on Wednesday after a steep fall in the previous session as OPEC and its allies’ decision to extend output cuts was not enough to counter investors’ concerns about the slowing global economy. Prices were supported by widely-watched data showing a larger-than-expected drawdown in U.S. crude oil inventories, with government data due later in the day. Brent crude futures for September delivery were trading up 64 cents at $63.04 a barrel by 1136 GMT. U.S. crude futures for August were up 47 cents at $56.72 a barrel. Both benchmarks fell more than 4% on Tuesday as worries about a slowing global economy. Gold prices rose on Wednesday on worries over global growth and as latest nominations to major central banks reinforced expectations of monetary policy easing. Spot gold was up 0.5% at $1,425.70 per ounce, having earlier hit its highest since June 25, at $1,435.99. U.S. gold futures rose 1.5% to $1,429.30.