Wednesday September 12th

12-09-2018

US stock futures edge higher as trade conflicts continue to fester

U.S. stock index futures pushed higher ahead of Wednesday's open, adding onto the gains seen in the previous trading session. Around 7 a.m. ET, Dow Jones Industrial Average futures rose 22 points, indicating a gain of 37.94 points at the open. Futures on the S&P 500 and Nasdaq 100 also indicated a positive open for their respective markets. An air of caution continues to linger among investors worldwide, as turbulence surrounding trade relations and politics bubble away. Last Friday, President Donald Trump told reporters that he was "ready to go" on hitting China with an additional $267 billion worth of tariffs, on top the already $200 billion in tariffs, previously announced. This Tuesday, news emerged that China would seek permission from the World Trade Organization to inflict sanctions upon the U.S. soon; meantime investors question what this will mean for the two nations going forward. In fact, at the Eastern Economic Forum in Russia, leading figures including President Vladimir Putin have been discussing the threat of protectionism, with Russia and China pledging to fight this issue. Weekly mortgage applications fell 1.8 percent last week as rates hit a five-week high. The wholesale cost of U.S. goods and services fell in August for the first time in a year and a half as the recent upturn in inflation appeared to ease. The producer price index declined by 0.1% last month, the Labor Department said Wednesday. Economists polled by MarketWatch had forecast a 0.2% increase. The drop in wholesale prices was the first since February 2017. The U.S. Federal Reserve's Beige Book release, out at 2 p.m. ET. Asia markets broadly fell on Wednesday as the MSCI Asia ex-Japan index touched 14-month lows, on the back of news that China will be making a request to the World Trade Organization to impose sanctions on the U.S. Japan's Nikkei 225 slipped 0.27 percent to close at 22,604.61, while South Korea's Kospi ended the trading day largely flat. In the Greater China region, Hong Kong's Hang Seng indexremained in bear territory, trading 0.54 percent lower as of 3:08 p.m. Markets on the mainland also continued the downward trend for the day, with the Shanghai composite closing 0.33 percent lower at around 2,656.11 while the Shenzhen composite shed 0.407 percent to end the trading day at approximately 1,403.60. Oil steadied on Wednesday, having neared its highest level this year after a drop in U.S. crude inventories and the prospect of the loss of Iranian supply added to concerns over the delicate balance between consumption and production. Brent crude futures were last up 15 cents on the day at $79.21 a barrel, having touched a session peak of $79.66, the highest since late May, when the price broke above $80. U.S. crude futures were up 61 cents at $69.86 a barrel. Gold prices edged lower on Wednesday as a key technical resistance acted as a deterrent for the metal and the yuan weakened against the dollar on fears the U.S.-China trade war could escalate. Spot gold was down 0.3 percent at $1,194.08 an ounce at 0406 GMT, after hitting its lowest since Aug. 24 at $1,187.21 on Tuesday. U.S. gold futures were down 0.3 percent at $1,198.90 an ounce.