Wednesday August 30th

30-08-2017

Futures point to a higher open as Wall Street pushes North Korea nerves to the side

U.S. stock index futures pointed to a higher open on Wednesday, as geopolitical concerns surrounding North Korea and the West appeared to show signs of receding. Dow Jones industrial average futures rose 12 points, while S&P 500 and Nasdaq 100 futures advanced 0.25 points and 7.5 points, respectively. In the previous day's trade, markets worldwide were on edge following news that North Korea had fired a ballistic missile which had passed over Japan. However, investor nervousness around North Korea appears to have eased. This comes as President Donald Trump issued a statement which said that "all options are on the table" when it comes to its relationship with North Korea going forward. "The world has received North Korea's latest message loud and clear: this regime has signaled its contempt for its neighbors, for all members of the United Nations, and for minimum standards of acceptable international behavior," Trump said in a statement, adding that "threatening and destabilizing actions" would only increase the North Korean regime's isolation among other nations. Meanwhile, Hurricane Harvey continues to cast a shadow over a number of sectors including energy, with oil prices coming under pressure, as refineries continue to be affected by the natural disaster. At 8:31 a.m. ET, U.S. crude hovered around $46.01 per barrel, while Brent last stood around $51.53. Data will be at the forefront of investors' minds on Wednesday, as a whole slew of figures are set to be published. The ADP National Employment report showed private-sector jobs increased by 237,000 jobs in August, well above the expected 185,000. The ADP report is often used by traders as a preview to the government's monthly jobs report, which is set for release on Friday. The second estimate for gross domestic product data in the second quarter showed the U.S. economy grew by 3.0 percent, more than the expected increase of 2.7 percent. Weekly mortgage applications fell by 2.3 percent. In addition, Federal Reserve Governor Jerome Powell is due to speak in Chicago with discussion on "the role of boards at large financial firms" at the Large-Bank Directors Conference. Overseas, European stocks were trading higher in morning trade, while markets in Asia closed in the black. Japan's Nikkei 225 added 0.74 percent, or 143.99 points, to close at 19,506.54. Across the Korean strait, the Kospi edged up 0.32 percent to end at 2,372.29, as tech stocks made gains following Tuesday's sell off on North Korea's missile launch. Greater China markets were mixed. The Hang Seng Index rose 0.98 percent by 3:01 p.m. HK/SIN. Mainland markets turned in a more subdued performance: The Shanghai Composite shed 0.07 percent, or 2.2314 points, to close at 3,362.9947 while the Shenzhen Composite tacked on 0.354 percent, or 6.8445 points, to close at 1,938.9001. The price of gold steadied on Wednesday, after hitting a 9½-month peak in the previous session after North Korea fired a ballistic missile over Japan, but remained firmly above $1,300 with further near-term gains expected. The dollar came off a 2½-year low and world stocks rose after the United States' measured response to North Korea's missile test allayed investors' concerns and they turned their attention instead to some positive economic data. A stronger dollar also makes dollar-priced gold costlier for non-U.S. investors. Spot gold slipped 0.09 percent to $1,307.96 per ounce. On Tuesday, the price jumped to $1,325.94, the highest since Donald Trump was elected U.S. president, before closing flat. U.S. gold futures slipped 0.44 percent to $1,313.10 per ounce.