Tuesday March 13th

13-03-2018

Dow futures rise 100 points after inflation data meets expectations

U.S. stock index futures rose on Tuesday after the release of data showing inflation remains in check. Around 8:30 a.m. ET, Dow futures were up 128 points, indicating a rise of 155.39 points at the open. The Nasdaq and the S&P 500 futures also indicated a positive open for their respective markets. The U.S. consumer price index rose 0.2 percent in February, in line with expectations. Inflation concerns permeated through the market last month as investors worried that higher inflation would lead the Federal Reserve to tighten monetary policy at a faster rate. The moves in premarket trade came after Wall Street finished mostly lower Monday, with the Dow Jones industrial average falling more than 150 points, as concerns surrounding a potential trade war resurfaced. Last week, President Donald Trump signed two declarations which would implement tariffs on steel and aluminum imports. The tariffs  are expected to take effect in the coming weeks and will see a 25 percent charge placed on steel, and 10 percent levy on aluminum — Canada and Mexico however are exempt. Investors remain on edge over concerns that countries around the world may strike back because of the tariffs. In Tuesday's session, economic data is set to dominate sentiment — particularly the releases concerning inflation. At 6 a.m. ET, the NFIB Small Business Optimism Index is due out, followed by a whole batch of core consumer price index (CPI) data, scheduled to be released at 8:30 a.m. ET. In the corporate space, on Monday, Trump shut down Broadcom's proposed buyout of Qualcomm, citing concerns based on national security. Both companies have been ordered to abandon this deal immediately. Asian stock markets ended mixed on Tuesday, after Wall Street gave up gains and as investors look forward to the release of U.S. inflation data later in the day. Over in Japan, the benchmark index Nikkei 225 alternated between being in the red and green before closing 0.66 higher despite fresh developments in a cronyism scandal that could hit Prime Minister Shinzo Abe's government. South Korea's Kospi index was up 0.42 percent at the close, after steel player Posco recoup earlier losses to gain 0.14 percent. In Greater China, Hong Kong's Hang Seng Index was 0.27 percent lower at 3:15 p.m. HK/SIN, while mainland China's Shanghai composite closed 0.46 percent down. Oil prices dipped on Tuesday, extending losses from the previous session, as the inexorable rise in U.S. crude output weighed on markets. U.S. West Texas Intermediate (WTI) crude futures were at $61.18 a barrel at 0747 GMT, down 18 cents, or 0.3 percent, from their previous close. Brent crude futures were at $64.77 per barrel, down 18 cents, or 0.3 percent. Both crude benchmarks dropped by around 1 percent in their Monday sessions. Gold slipped on Tuesday, pressured by a firmer dollar and concern that U.S. inflation data later in the day will be robust, strengthening the case for more U.S. interest rate hikes. "If you have a higher than expected CPI reading today it would put more downward pressure on gold, especially if yields also go up," said Georgette Boele, commodity strategist at ABN AMRO in Amsterdam. "Overall the outlook is not looking that great in the short term. I still expect prices to go towards $1,300." Spot gold was down 0.3 percent at $1,318.35 per ounce by 1022 GMT, while U.S. gold futures for April delivery fell 0.2 percent to $1,318.70 an ounce. The dollar index was up 0.17 percent at 90.047, while the dollar jumped to a two-week high against the yen.