Tuesday December 22nd

22-12-2015

US futures jittery after GDP data

U.S. stock index futures pointed to a flat open on Tuesday after the release of GDP data, as oil prices continued to weigh on investors in the last few trading days before the Christmas holiday. The final read on third-quarter GDP came in at an annualized rate of 2 percent. Economists polled by Reuters expect annual growth of 1.9 percent, down slightly from the second estimate of 2.1 percent but above the advance estimate of 1.5 percent. November existing home sales figures are out at 10:00 a.m. and October's FHFA home price index is also due for release at 9:00 a.m. Heading into the final two weeks of the year, limited liquidity is likely to heighten the severity of market moves, particularly during the holiday periods of Christmas and New Year's Eve, when most Western markets will be closed. "The market is likely to be driven increasingly by positioning, year-end related flows and momentum rather than relative economic fundamentals over the less liquid holiday period. The U.S. dollar could weaken both modestly and temporarily during this period as the market remains heavily long U.S. dollars as evident in the latest IMM positioning report," said currency analyst at Bank of Tokyo-Mitsubishi UFJ, Lee Hardman. Oil prices edged away from multi-year lows on Tuesday, but mild weather and ballooning supplies mean that prices are expected to remain depressed into 2016. Internationally traded benchmark Brent was at $36.36 per barrel Tuesday. That was over $2 above the 11-year low hit on Monday, although the price jump was more related to a roll-over in contracts and the start of the peak demand winter season than because of changing fundamentals, according to traders. U.S. West Texas Intermediate (WTI) crude futures were at $35.95 per barrel, up from 2009 lows of $33.98 during the previous session. Brent crude oil prices fell to levels last seen in 2004 on Monday, dropping below the lows hit during the 2008 financial crisis on renewed worries over a global oil glut. On the earnings front, Nike will report after the bell. In Europe, equities traded mixed, despite a recovery in oil prices from multi-year lows. A full-blown Santa Claus rally remained elusive, but Asian markets ended mostly a tad higher Tuesday, as the jolly fat man delivered a glimmer of green in the little time left to trade before the holiday. Bucking the broader market trend, Japan's shares ended a tad lower after briefly popping into the green in afternoon trade. The Nikkei 225 index ended down 29.32 points, or 0.2 percent, at 18,886.70. Japan's market will be closed Wednesday for the emperor's birthday. Hong Kong's Hang Seng Index added 38.34 points, or 0.2 percent, to 21,830.02 and the Shanghai Composite gained 0.3 percent, or 9.77 points, to 3652.24, a nearly one-month high. Gold traded lower on Tuesday after the release of third-quarter U.S. GDP data, which came in at 2 percent, after a two-day rally. The metal has risen 3 percent since touching its lowest in almost six years last week after the Federal Reserve unveiled its first rate rise in nearly a decade. Spot gold stood at $1,075.30 an ounce, while U.S. gold futures for February delivery were down $5.10 cents at $1,075.20.