Tuesday February 23rd

23-02-2016

Wall Street eyes oil price gyrations

U.S. stock index futures indicated a lower open on Tuesday as a rebound in commodity prices ran out of steam and global equities lost ground. Oil, which has been the top of investors' minds for the last few months, slipped with WTI futures dropping closer to $32 a barrel on the back of concerns of a supply glut from Iran. There should also be some important headlines for the oil market Tuesday when Saudi Oil Minister Ali al-Naimi speaks at the CERAWeek energy conference in Houston later. European equities followed the negative tone set in Asia overnight where markets traded mostly lower. This came after a rally Monday, with U.S. stocks closing more than 1 percent higher, building on their best weekly gain of 2016. In the U.S., earnings are due from First Solar, Dreamworks Animation, and Papa John's. On the data front, the S&P/Case-Shiller home price index will be out at 9.00 a.m. ET and existing home sales, consumer confidence data an hour later. Investors will also be watching for more hints on future policy at the U.S. Federal Reserve and whether it will continue its tightening process this year. Minneapolis Fed President Neel Kashkari is due to speak at 8.30 a.m. with Dallas Fed President Rob Kaplan shortly afterwards. Fed Vice Chairman Stanley Fischer is also due to speak after the closing bell at 8.30 p.m. Asia stocks lost momentum Tuesday with major indexes slipping as an overnight improvement in market sentiment ran out of steam. Japan's benchmark Nikkei 225, which was up over 1 percent in early trade, gave up all of its gains to close down 59 points,or 0.37 percent, at 16,052.05. The broader Topix index also erased gains to finish lower by 8.83 points, or 0.68 percent, to 1,291.17. Chinese markets also lost ground with the main Shanghai composite index closing down 23.22 points, or 0.79 percent, at 2,903.95. The smaller Shenzhen composite fell 11 points, or 0.58 percent, to 1,877.18. Oil futures seesawed on Tuesday, after the previous day's gains were eroded by doubts a potential production freeze will have any impact on a supply glut. Big oil exporters Saudi Arabia and Russia have proposed to freeze output at January levels, which were near record highs, only if other producers also do the same. International benchmark Brent crude futures were down 1 cent at $34.68 a barrel at 8:40 a.m. EDT (1340 GMT), while U.S. crude futures fell 24 cents to $33.15 a barrel. Gold rose by about 1 percent on Tuesday as European shares fell and inflows into bullion funds continued, boosting to prices. Assets in SPDR Gold Trust, the top gold-backed exchange-traded fund (ETF), rose more than 19 tonnes to 752.29 tonnes on Monday, the highest since March 2015. The fund's inflows since the beginning of the year have already surpassed outflows for the whole of 2015. Spot gold was up 1.25 percent at $1,223.56 an ounce. Prices had fallen 1.6 percent on Monday, when the dollar and equities rallied.