Thursday August 18th

18-08-2016

US futures lower after data, Fed minutes

U.S. stock index futures indicated a slightly lower open on Thursday as traders digested economic data and continued the minutes of the last Fed meeting. The July minutes released Wednesday afternoon showed a divided Fed, worried about inflation and split over the strength of the economy. That now makes December its best and probably only chance for a rate hike this year, strategists said. On the data front, weekly jobless claims fell 4,000 to 262,000, while the August Philadelphia Fed business index came in line with expectations. Leading indicators are set to be released at 10 a.m. Fed speakers on Thursday include San Francisco Fed President John Williams, Dallas Fed President Robert Kaplan, and New York Fed President William Dudley. On the earnings front, Wal-Mart reported better-than-expected profits and raised its guidance. Hormel Foods also posted quarterly results that were above expectations. Applied Materials and Gap are among companies set to report after the bell. In Europe, the pan European Stoxx 600 Index was up by around 0.42 percent. In Asia, Japan's Nikkei closed 1.55 percent lower on Thursday, while in China the Shanghai Composite closed 0.17 percent lower. U.S. crude topped $47 a barrel and international benchmark Brent traded above $50 for the first time in six weeks on Thursday as the world's biggest producers prepared to discuss a possible freeze in output levels. West Texas Intermediate (WTI) crude futures were trading at $47.15 a barrel by 8:46 a.m ET (1246 GMT) up 36 cents and near a high going back to July 7. The strength of WTI on Thursday was also a result of a flood of new orders to ship U.S. crude to Europe to take advantage of arbitrage opportunities resulting from a wide spread between the U.S. and European benchmarks. Brent crude oil futures rose 1 cent to $49.68 per barrel after earlier rising as high as $50.05 a barrel. Gold steadied on Thursday, buoyed July meeting showed policymakers were divided over whether to raise interest rates soon. Members of the Fed's rate-setting Federal Open Market Committee were generally upbeat about the U.S. economy and labour market, but several said any slowdown in future hiring would argue against a near-term hike. Spot gold was up 0.26 percent at $1,351.76 an ounce, on track for a fourth straight day of gains. U.S. gold climbed 0.6 percent to $1,357 an ounce. "Until we have clarity around the U.S. rate hike, gold is going to remain rangebound between $1,320 and $1,370," said ING Bank senior strategist Hamza Khan.