Wednesday January 3rd

3-01-2018

US futures rise as Wall Street shakes off geopolitics and looks to Fed minutes

U.S. stocks futures pointed to a higher open on Wednesday, as investors turned their attention away from geopolitical tensions and toward upcoming economic news and data. Dow Jones industrial average futures rose 43 points, while S&P 500 and Nasdaq 100 futures gained 4.25 points and 13 points, respectively. In the previous session Tuesday, the first trading day of 2018, U.S. markets finished trade in the black with the Dow closing above 100 points. In data news today, all eyes are on the Federal Open Market Committee (FOMC) minutes. The document, due out at 2 p.m. ET, will contain the minutes of the U.S. central bank's most recent meeting. In December, the institution raised interest rates by a quarter point and hiked its growth outlook for the U.S. economy. Investors are expected to pore over the minutes to see if the Fed provides any additional clues as to how the U.S. economy is currently performing. On the data front, mortgage applications fell in the last week of 2017 as rates rose. The manufacturing ISM report on business and construction spending are both due out at 10 a.m. ET. Geopolitics will also continue to put global markets on edge during today's session. On Tuesday, President Donald Trump tweeted that his "nuclear button" was "much bigger and more powerful" than the one controlled by North Korea's leader Kim Jong-un. The U.S. incumbent's tweet comes after a New Year's Day address from Jong-un, who said the isolated state's nuclear weapons could reach anywhere in the U.S. Trump also threatened via Twitter to cut off U.S. aid to the Palestinian Authority, questioning why the U.S. should make "any of these massive future payments" when Palestinians are "no longer willing to talk peace." Markets traded higher Wednesday despite the geopolitical uncertainty. In earnings, Commercial Metals, UniFirst and Rite Aid are due. Asian stocks closed with moderate gains on Wednesday, tracking sizable increases seen on Wall Street overnight as the dollar traded near three-month lows. South Korea's benchmark Kospi index edged up 0.27 percent to close at 2,486.35 as large cap technology names extended the moderate gains seen last session. Hong Kong's Hang Seng Index edged up 0.08 percent by 3:35 p.m. HK/SIN after soaring 2 percent on Tuesday, with technology shares continuing their ascent. Mainland markets also trended higher, with the Shanghai Composite advancing 0.65 percent to end at 3,370.1 and the Shenzhen Composite adding 0.77 percent to close at 1,934. Japanese markets are closed on Wednesday for an exchange holiday. U.S crude oil hit a fresh 2½-year high on Wednesday as high output in the United States and Russia balanced tensions from a sixth day of unrest in OPEC member Iran. U.S. West Texas Intermediate (WTI) crude futures were at $60.86 a barrel by 7:51 a.m. ET (1251 GMT), up 49 cents from their last close, after touching $60.90, the highest since June 2015. Brent crude futures — the international benchmark for oil prices — were at $67 a barrel, up 43 cents but still trailing Tuesday's high of $67.29 that was the most since May 2015. Gold eased from an earlier 3-1/2 month high on Wednesday and was on track for its first day of losses in nearly three weeks as a firmer tone to the dollar pressured assets priced in the U.S. currency. The dollar's late December retreat drove gold sharply higher over the same period, leading to fears that the metal was becoming overbought. Spot gold was down 0.3 percent at $1,314.03 an ounce at 1040 GMT, off an earlier peak of $1,321.33, while U.S. gold futures for February delivery were down 80 cents an ounce
at $1,315.30.