Friday July 12th

12-07-2019

Dow futures rise after Fed chief hints at rate cut ahead

U.S. stock index futures were slightly higher Friday morning, amid optimism rooted in expectations of a Federal Reserve rate cut later this month. Around 6 a.m. ET, Dow futures indicated a positive open of more than 85 points. Futures on the S&P and Nasdaq were both seen higher. Federal Reserve Chairman Jerome Powell suggested on Thursday that the U.S. central bank has room to ease monetary policy at its next meeting. Powell’s comments came during his second day of testimony before Congress. The Fed chief, who has been under pressure from President Donald Trump to cut rates, has made a strong case to lower borrowing costs in order to offset a global slump in business confidence amid trade tensions. Meanwhile, Trump said in a tweet on Thursday that China was not living up to promises it made on buying agriculture products from American farmers. His comments threatened to revive worries about trade, with the world’s two largest economies locked in a protracted dispute. The producer price index rose a modest 0.1% in June, indicating that inflation remains under wraps. Economists polled by MarketWatch had predicted a 0.1% fall. The increase in wholesale inflation over the past year inched down to 1.7% in June, the lowest level in more than two years, the government said Friday. Excluding food, energy and trade margins, the so-called core PPI rate was flat last month after two straight months of 0.4% gains. The yearly rate of increase in core prices decreased to 2.1% from 2.3%. In corporate news, Infosys will release their latest quarterly earnings before the opening bell. Stocks in major Asian stock markets mostly closed higher on Friday. Meanwhile, China’s trade with the U.S. declined in the first half of the year, amid an impasse between the two economic giants. The Nikkei 225 in Japan closed 0.2% higher at 21,685.90, while the Topix index fell 0.15% to end its trading day at 1,576.31. Over in South Korea, the Kospi advanced 0.29% to close at 2,086.66. Mainland Chinese stocks rose on the day, with the Shanghai composite up 0.44% to 2,930.55 and the Shenzhen composite 0.506% higher to 1,556.77. The Shenzhen component also gained 0.66% to close at 9,213.38. Hong Kong’s Hang Seng index added 0.23%, as of its final hour of trading. Oil prices hovered near six-week highs on Friday and was on track for a weekly gain as U.S. oil producers in the Gulf of Mexico cut more than half their output because of a tropical storm and as tensions continued to simmer in the Middle East. Brent crude futures were up 57 cents, or 0.9%, at $67.09 per barrel by 0642 GMT. The international benchmark settled down 0.7% on Thursday after hitting its highest since May 30 at $67.65. U.S. West Texas Intermediate (WTI) crude futures were up 46 cents, or 0.8%, at $60.66 a barrel. In the previous session, the U.S. benchmark rose to as much as $60.94, its highest since May 23. Brent prices have climbed 4.4% this week, while WTI prices rose 5.4%. Both the benchmark crudes posted declines last week. Gold prices rose on Friday and were on track to post a weekly gain, consolidating above $1,400 as renewed Sino-U.S. trade tensions amid global growth jitters and prospects of an interest rate cut by the U.S. Federal Reserve stoked safe-haven demand. Spot gold was up 0.6% at $1,411.67 per ounce as of 0728 GMT. Gold has risen nearly 0.9% so far this week. U.S. gold futures gained 0.3% to $1,411.30 an ounce.