Thursday September 26th

26-09-2019

Stock market futures cut gains after Trump whistleblower complaint is released

U.S. stock index futures gave back some of their initial gains after a whistleblower complaint against President Donald Trump was released. At around 8:42 a.m. ET, Dow Jones Industrial Average futures indicated a gain of just 22 points at the open. S&P 500 pointed to a marginal gain while Nasdaq 100 futures slid. Wall Street ended Wednesday on a higher note after President Donald Trump said that a U.S.-China trade deal could arrive sooner-than-expected. Trump’s comments sent equities higher, with the Dow jumping 162.94 points. Bloomberg News also reported China is expected to increase its U.S. soybeans purchases during trade talks next month. Both countries have engaged in a tit-for-tat tariff war since 2018. Caterpillar and Boeing traded slightly higher in the premarket. Meanwhile, investors are also monitoring an impeachment inquiry started at the House of Representatives on Tuesday, in relation to a call between President Trump and his Ukrainian counterpart, Volodymyr Zelensky. A transcript from the call, released Wednesday, did not appear to show and explicit quid pro quo by Donald Trump. However, more details of their phone conversation are yet to be released. Investors will hear more about the whistleblower complaint that launched the House impeachment inquiry when the acting director of National Intelligence, Joseph Maguire, testifies before the House Intelligence Committee at 9 a.m. On the data front, The number of Americans filing applications for unemployment benefits rose moderately last week, pointing to sustained labor market strength. Initial claims for state unemployment benefits increased 3,000 to a seasonally adjusted 213,000 for the week ended September 21, the Labor Department said on Thursday. Data for the prior week was revised to show 2,000 more applications received than previously reported. Economists polled by Reuters had forecast claims increasing to 212,00 in the latest week. The Labor Department said only claims for Puerto Rico were estimated last week. International trade figures out at 8:30 a.m. ET. At the same time, it will also be released the final reading of real growth domestic product GDP data from the second quarter of this year. In corporate news, Carnival and Vail Resorts will be reporting. Several Federal Reserve members will also be making speeches throughout the day, including St. Louis Fed President James Bullard at 10 a.m. ET. Stocks in Asia were mixed on Thursday amid hopes that the U.S. and China could strike a deal soon. U.S. President Donald Trump said at the United Nations in New York on Wednesday that a deal between the U.S. and China could come sooner “than you think.” The two largest economies of the world have attempted to find a deal to end their protracted trade dispute which has lasted for more than a year and rattled financial markets globally. Mainland Chinese shares dropped on the day, with the Shenzhen component slipping 2.13% to 9,464.84 and the Shenzhen composite falling 2.505% to approximately 1,597.72. The Shanghai composite slipped 0.89% to about 2,929.09. Hong Kong’s Hang Seng index rose 0.21%. Elsewhere, the Nikkei 225 in Japan rose 0.13% to close at 22,048.24. The Topix ended its trading day 0.2% higher at 1,623.27, after earlier touching levels not seen since December 2018. South Korea’s Kospi closed fractionally higher at 2,074.52. Oil prices edged lower on Thursday, extending losses from the previous two sessions, as Saudi Arabia quickly regained production volumes after an attack on its oil facilities and amid increasing signs of slowing demand. Brent crude futures were at $62.36 a barrel, down 3 cents, or 0.1%, from the previous close. U.S. West Texas Intermediate (WTI) crude futures were 9 cents lower, or 0.2%, to $56.40 a barrel. Brent and WTI prices have dropped 3.7% and 3.8%, respectively, since their close on Monday, weighed down by a surprise 2.4 million-barrel build in U.S. crude inventories last week, and a faster-than-expected recovery of Saudi output capacity after the Sept. 14 attacks on two of its oil processing plants. Gold edged higher on Thursday as investors bought into the market following a sharp fall in the previous session, but bullion’s gains were limited as the dollar remained firm. Gold prices slipped as much as 2% on Wednesday as political uncertainties in the United States stemming from an impeachment inquiry into President Donald Trump drove investors to the safety of the dollar. “The primary factor what’s impacting gold right now is a stronger dollar ... people still see the dollar as the prime destination of safety, so essentially the dollar has taken some off gold’s safe-haven flows,” said FXTM analyst Lukman Otunuga. The U.S. currency climbed to a three-week peak and hovered within striking distance of a two-year high of 99.370 hit earlier this month.

Spot gold showed signs of recovery on Thursday, rising 0.2% at $1,507.24 per ounce. U.S. gold futures were up 0.2% at $1,514.90.