Wednesday July 13th


US futures point to slightly higher open as rally pauses

U.S. stock index futures traded narrowly higher on Wednesday after the Dow Jones industrial average and the S&P 500 indexes closed at record highs on Tuesday. The S&P closed 0.7 percent higher at 2,152.14 points and the Dow ended at 18,347.67 on Tuesday, as fears over Brexit abated and Japan signaled more stimulus measures. Japan's Nikkei 225 posted gains once again on Wednesday on the back of the weaker yen and expectations of a double-whammy of fiscal and monetary stimulus in the country. In Hong Kong, the Hang Seng index was up 0.51 percent. Chinese mainland markets also finished in positive territory, with the Shanghai composite closing up 10.83 points, or 0.36 percent, at 3,060.21 and the Shenzhen composite was higher by 16.64 points, or 0.82 percent, at 2,041.66. In South Korea, the Kospi gained 14.32 points, or 0.72 percent, at 2,005.55. U.K. and European stocks traded largely higher on Wednesday ahead of the installment of Theresa May as U.K. prime minister in the evening. She will replace David Cameron, who resigned after the U.K.'s referendum on European Union membership vote last month. "Investors have erased global Brexit losses and want to lock some profit after a massive rally," Naeem Aslam, chief market analyst at Think Markets UK, said in a note on Wednesday. "Generally speaking they are poised to take to take risk, however, caution remains the main theme among traders over in Europe. There have been some impressive gains over in Asia and U.S.; therefore you could say risk mode is gathering steam." U.S. companies reporting second-quarter earnings on Wednesday include Yum Brands and CSX (after Wall Street closes). The Federal Reserve's Beige Book will be out on Wednesday. Meanwhile, import prices rose 0.2 percent in June, below the 0.5 percent expected increase. The International Energy Agency warned on Wednesday of signs global oil demand was flagging, while supply remained at "elevated levels." The U.S. government's Energy Information Administration (EIA) releases official weekly inventory data at 1430 GMT on Wednesday. Global benchmark Brent oil was down 74 cents at $47.73 a barrel at 1139 GMT after settling up $2.22, or 4.8 percent, in the previous session. U.S. crude traded at $46.25 a barrel, down 55 cents on Tuesday's close. Gold rose marginally on Wednesday, recovering from selling pressure in early trade that pushed bullion to a near two-week low, with investors using the opportunity to hunt for bargains even as improved risk appetite helped global equities rally. Spot gold was up 0.4 percent at $1,336.65 per ounce after touching $1,327.30, its lowest since July 1. Bullion fell 1.7 percent on Tuesday, its biggest one-day drop since May 24. Gold futures for August delivery inched up 0.31 percent to $1,339.20 an ounce, after falling 1.6 percent in the previous session.