Tuesday September 13th


Oil price volatility, Fed expected to take center stage on Wall Street

U.S. stock index futures pointed to a lower open on Tuesday, as investors kept an eye on the price fluctuations in oil, amid speculation over when the Federal Reserve could raise interest rates. The Dow Jones index was down some 112 points, while the S&P 500 was down 14 points and the Nasdaq down 24 points. Markets had been choppy on Monday as concerns of a possible interest rate hike in September by the U.S. central bank added volatility to markets both in the U.S. and overseas. However, U.S. stocks ended the session sharply up on Monday, after Fed Governor Lael Brainard said it would be wise for the central bank to keep monetary policy loose. Meanwhile Atlanta Fed President, Dennis Lockhart said a "serious discussion" on raising rates was warranted at the central bank's next meeting. The positive sentiment from the U.S. on Monday failed to completely lift international markets on Tuesday however, with Asia-Pacific indexes closing mostly mixed, and Europe trading in a mixed range during its morning trade. The Japanese benchmark index Nikkei 225 closed up 0.34 percent, or 56.12 points, at 16,729.04, off an earlier high of 16,787.06. South Korea's Kospi finished up 0.4 percent, or 7.88 points, at 1,999.36. Mainland China markets were mixed; the Shanghai composite closed nearly flat up 0.06 percent, or 1.814 points, at 3,023.792 and the Shenzhen composite ended up 0.621 percent, or 12.277 points, at 1,989.334. In Hong Kong, the Hang Seng index was down 0.11 percent, as of 3:22 pm HK/SIN time. Aside from the Fed, oil has added pressure to the markets on Tuesday as increased oil drilling activity in the U.S. remains a key concern. Meanwhile the International Energy Agency warned in its latest report that markets would have to wait "a while longer" for the oil market to rebalance. Crude futures posted solid losses on Tuesday, with U.S. West Texas Intermediate last standing around $45.28 per barrel, while Brent hovered at $47.43. On the data front, the Federal Budget is set for release at 2.00 p.m. ET. When it comes to earnings, GMS posted quarterly results. "It is still the same story of a $1,300-$1,400 range for gold. I don't think we are going to see any major move until the Fed meeting next week," said Yuichi Ikemizu, head of commodity trading at Standard Bank in Tokyo. Spot gold was down about 0.04 percent at $1,326.66 an ounce. U.S. gold futures were up 0.4 percent at $1,330.30 an ounce. Traders trimmed their odds for a September rate hike to 15 percent from 24 percent on Friday, according to CME Group.