The Breakfast Briefing: U.S. & Global Stocks Wobble As Crude Holds Gains

Ted

FYI: U.S. stocks were set to open slightly lower Tuesday morning.

At around 2:15 a.m. ET, Dow futures fell 43 points, indicating a negative open of more than 41 points. Futures on the S&P and Nasdaq were also marginally lower.

Wall Street ended mostly lower on Monday amid ongoing fears over a potential increase in oil prices, after drone strikes in Saudi Arabia. U.S. President Trump said he is not in a rush to respond to the attacks.

• Treasurys yields tick lower

• Chinese stocks drop

• Oil prices edge lower

Global stocks wobbled amid heightened tensions in the Middle East and after China’s central bank disappointed market hopes for an interest-rate cut.

European stocks were flat in opening trade after a downbeat session in Asia. The Shanghai Composite dropped 1.7% and Hong Kong’s Hang Seng fell 1.5%.

U.S. officials believe Iran was responsible for attacks on major Saudi Arabian oil production facilities, and shared intelligence on the matter with kingdom.

Brent crude, the global oil benchmark, dropped 0.4% Tuesday to $68.78 a barrel. But the downward move did little to dent a historic rally in prices following damage to Saudi oil facilities as investors tried to calculate the likely impact on global supplies.

Despite the gloom, Japan’s Nikkei edged up 0.1% as President Trump moved ahead with a partial commerce deal with the country on areas such as digital technology and agriculture. The step should see some tariffs on Japanese imports to the U.S. lowered.

Europe, however, was braced for fresh tariffs from the Washington, over a long-running battle over aircraft maker subsidies.

Gold, the traditional haven, was down 0.6% after climbing Monday amid the rising geopolitical tensions.

The Federal Reserve later Tuesday will release August’s industrial production figures, an important measure of how U.S. manufacturing has held up amid a slowdown in global trade. Factory output fell 0.4% in July from the previous month.

In currencies, the British pound may face another day of volatility as the U.K’s supreme court examines the legal basis for Prime Minister Boris Johnson ’s decision to suspend Parliament amid Brexit tensions. The pound was recently down 0.3% against the U.S. dollar.

The U.S. 10-year Treasury yield fell to 1.830%, from 1.843% Monday. Bond yields fall as prices rise.
Regards,
Ted

WSJ:
https://www.wsj.com/articles/global-stocks-wobble-as-crude-holds-gains-11568707708

Bloomberg:
https://www.bloomberg.com/news/articles/2019-09-16/asia-stocks-set-for-muted-open-treasuries-climb-markets-wrap

IBD:
https://www.investors.com/market-trend/stock-market-today/dow-jones-futures-apple-stock-market-rally-show-resilience-crude-oil-shopify-stock-funko-stock/

CNBC::
https://www.cnbc.com/2019/09/17/dow-futures-down-ahead-of-federal-reserve-meeting.html

Reuters:
https://uk.reuters.com/article/us-usa-trade-china-analysis/trade-talks-seen-as-unlikely-to-mend-u-s-china-divide-idUKKBN1W20EB

U.K.
https://uk.reuters.com/article/uk-britain-stocks/ftse-100-steadies-after-saudi-attacks-sirius-minerals-plummets-idUKKBN1W20PR

Europe:
https://www.reuters.com/article/europe-stocks/european-shares-lower-as-germanys-zalando-slumps-oil-stocks-ease-idUSL3N2681NU

Asia:
https://www.marketwatch.com/story/asian-markets-slip-as-tensions-remain-high-after-attack-on-saudi-oil-facilities-2019-09-16/print

Bonds:
https://www.cnbc.com/2019/09/16/us-bonds-investors-seek-shelter-after-saudi-oil-attacks.html

Currencies:
https://www.cnbc.com/2019/09/17/forex-markets-attacks-on-saudi-oil-facilities-in-focus.html

Oil:
https://www.cnbc.com/2019/09/17/oil-markets-attacks-on-saudi-arabia-oil-facilities-in-focus.html

Gold:
https://www.cnbc.com/2019/09/17/gold-markets-us-federal-reserve-in-focus.html

Cuirrent Futures:
https://finviz.com/futures.ashx