Tuesday February 16th


Dow futures briefly add 200 points; oil struggles for gains

Traders in the U.S. are due back at work Tuesday, after markets were closed for Presidents Day, with the oil price fluctuating wildly before the session open. Overnight, oil prices rallied on hopes of a production cut with the world's biggest oil producers — including Saudi Arabia and several key OPEC members — meeting in Doha. However, WTI briefly turned negative as traders were left disappointed at an announcement that the producers had frozen output at January levels. The U.S. Empire Manufacturing Index for February came in at negative 16.64, a worse read than expected but better than January's print of minus 19.37. European stocks held mixed, while U.S. stock index futures held below session highs. Earlier, Dow futures added more than 200 points. Meanwhile, market watchers will be looking to central bankers for more hints on future monetary policy after steep losses for risk assets this year. At 9 a.m. ET Philadelphia Fed President Patrick Harker is due to speak followed shortly afterwards by Minneapolis Fed President Neel Kashkari. In the evening, Boston Fed President Eric Rosengren is also due to speak. Across the Atlantic on Monday, Mario Draghi, the president of the European Central Bank, said that it is "ready to do its part" to make "the euro area more resilient", hinting at further stimulus measures to come. Back in the U.S., Agilent, Cerner, Devon Energy, Express Scripts, Fossil, Kaiser Aluminum, Potbelly, Generac, Surgical Care Affiliates and Vornado Realty all report earnings on Tuesday. The NAHB survey is due at 10.00 a.m. and TIC (Treasury International Capital) data are due at 4 p.m. Chinese markets, on their second day of trading after returning from a week-long Lunar New Year break, led Asian markets as the Shanghai composite closed up 3.32 percent. The Shenzhen composite ended 4.09 percent higher. Japan's Nikkei 225, which surged 7 percent yesterday, erased early morning losses to close up 31.85 points, or 0.2 percent, at 16,054.43. Across the Korean Strait, the Kospi finished 26.10 points, or 1.40 percent, higher to 1,888.30. Oil prices dipped in and out of negative territory on Tuesday after four of the world's largest producers agreed to freeze output at January levels if other major exporters joined the pact, dashing hopes among the price bulls for an outright cut to supply. Qatari energy minister Mohammad bin Saleh al-Sada told a news conference that the step would help to stabilize the oil market, which has experienced price declines not seen since the early 2000s because of the pace at which supply has outstripped demand. Analysts said that while the decision is a step in the right direction to bring supply and demand back into balance, global inventories remain near record levels and are likely to dampen any price rallies. The oil ministers of Russia and Venezuela attended the meeting in the Qatari capital, together with Saudi oil minister Ali al-Naimi, who said the group's next steps would be assessed over the coming months. Brent crude futures were down 6 cents at $33.33 a barrel by 8:35 a.m. ET (1335 GMT), having fallen from an earlier peak of $35.55, the highest price since Feb. 4. U.S. crude futures were up 4 cents at $29.48, off the day's high of $31.53. Gold rose on Tuesday, snapping two days of losses and recovering from an early dive below $1,200 an ounce, as a retreat in stock markets from earlier highs boosted interest in the metal as a haven from risk. European shares dipped 0.3 percent, even as oil prices gave up early gains after an agreement among four top producers to freeze output was judged unlikely to have a big impact on a global glut of crude. Spot gold was up 0.2 percent at $1,211.76 an ounce at 1302 GMT. It earlier fell as low as $1,190.40, having shed 2.3 percent on Monday, its biggest one-day loss since mid-July.