Thursday September 19th


US stock futures turn positive, Microsoft shares gain

U.S. stock index futures were set to open slightly higher Thursday as gains in Microsoft, AT&T and technology companies offset what many investors considered an underwhelming decision by the Federal Reserve in the prior session. Dow futures rose 52 points, indicating a positive open of about 50 points. Futures on the S&P and Nasdaq were also higher ahead of the opening bell. The modest optimism on Thursday came amid a  new round of face-to-face talks between Chinese and American officials, starting in Washington later Thursday. The prospect of forward progress between the two sides appeared to buoy shares of chipmakers across the board, with Broadcom, Advanced Micro Devices all up in premarket trading. Software giant Microsoft climbed nearly 1.5% before the opening bell after announcing Wednesday evening that it authorized another $40 billion for share buybacks and will raise its quarterly dividend by 5 cents to 51 cents per share. U.S. negotiators including White House economic advisor Peter Navarro and Treasury Secretary Steven Mnuchin have both expressed modest optimism for forthcoming rounds of talks between the world’s two largest economies following a volatile August. Wall Street ended Wednesday trading little changed after the Fed approved a rate cut of one quarter point, but offered little for investors hoping for hints that the central bank would lower borrowing costs further. It continued to describe the U.S. labor market as “strong” and characterized GDP growth as “moderate.” Commenting on the FOMC’s decision in a press conference, Chairman Jerome Powell said that while the central bank wouldn’t hesitate to impose a “sequence” of interest rate cuts if economic conditions deteriorate, he doesn’t think that’s necessary now. “If the economy does turn down, then a more extensive sequence of rate cuts will be appropriate,” he said during his post-meeting news conference. “We don’t see that. It’s not what we expect.” The Fed’s second rate cut of 2019 brings the target range for the federal funds rate is now 1.75% to 2%. Stocks in Asia were mostly higher on Thursday after the U.S. Federal Reserve cut interest rates overnight — but the U.S. central bank appeared divided on its next course of action for the year. Mainland Chinese stocks were up on the day, with the Shanghai composite higher by 0.46% at about 2,999.28 and the Shenzhen component gaining 1.01% to 9,852.20. The Shenzhen composite added 1.028% to approximately 1,672.63. Hong Kong’s Hang Seng index, however, fell 1.07% to close at about 26,468.95. In Japan, the Nikkei 225 rose 0.38% to close at 22,044.45 while the Topix index added 0.56% to end its trading day at 1,615.66. Over in South Korea, the Kospi closed 0.46% higher at 2,080.35. Oil prices rose sharply on Thursday, supported by supply risks brought about by last weekend’s drone attacks on Saudi oil infrastructure and a cut in U.S. interest rates. Brent crude futures gained $1.33 to $64.91 a barrel, while U.S. West Texas Intermediate crude was up $1.03 at $59.17 a barrel. Gold edged up on Thursday as the focus returned to global growth risks and Middle East tensions, helping bullion recover slightly from the prior session’s 1% slide after the U.S. Federal Reserve cut interest rates but gave mixed signals on any future easing. Spot gold was up 0.2% at $1,496.26 per ounce, after falling on Wednesday to $1,484.16, a one-week low. U.S. gold futures slipped 0.8% to $1,503.80.