US Stocks To Open Lower, Gold Steady But Oil Slips

U.S. stocks may open lower Monday as President Donald Trump’s skepticism over the border wall deal seems to have raised concerns on yet another government shutdown.

The lower opening of U.S. stock index futures reflected that mood. At 3:15 a.m. EST, Dow futures traded just 89 points up. S&P 500 and Nasdaq futures indicated a decline as well.

Among the companies reporting earnings today are Caterpillar, Whirlpool and AK Steel.

In Europe, the pan-European Euro Stoxx 600 index slid lower in most of the bourses. Mining stocks were an exception and rose nearly 1 percent, thanks to the industry’s huge exposure to China.

Shares of Rio Tinto climbed 2.5percent after an upward price revision by Jefferies.

Ocado shares jumped 3.6 percent after reports of Marks & Spencer mulling a takeover.

Asia stocks slide

Asian stocks slipped as the U.S.-China trade talks loomed high. Shares traded lower in the afternoon and were preceded by a volatile session. Investors are watching new developments at the U.S.-China trade talks in which Vice Premier Liu will lead the Chinese delegation.

Among Chinese markets, mainland bourses shed early gains and closed lower. The Shanghai Composite lost 0.18 percent to close at around 2,596.98, while the Shenzhen ended the day lower at around 7,589.58. The Shenzhen composite index slipped 0.377 percent to close at 1,314.99.

The Hang Seng index at Hong Kong was flat. Japan’s Nikkei 225 slipped 0.60 percent and closed at 20,649.

Explaining the market concerns, Simon Baptist, chief economist at the Intelligence Unit of the Economist, told CNBC that there is an unwillingness by China to make concessions for investments the way U.S. firms had wanted.

He cited the pressure from European and U.S. governments on Chinese firm Huawei as the reason for Beijing refusing any change in its policy on foreign firms.

The two-day meeting of the Federal Open Market Committee’s (FOMC) from Tuesday will also influence the market mood. Fed Chair Jerome Powell and his team may decide to pause the interest rates hike, reports quoting Tai Hui, the chief market strategist at J.P. Morgan Asset Management, said.

Oil down on U.S. Rig Fleet Expansion

Meanwhile, oil prices crashed Monday after U.S. oil firms expanded the number of rigs for higher crude production despite plummeting demand from China that is reeling under new signs of economic slowdown.

The U.S. crude oil futures were at $53.43 per barrel at 0253 GMT, down by 0.5 percent from their last settlement. International Brent crude oil futures were down at $61.50 a barrel, slipping 0.2 percent.

The number of US rigs looking for new oil in 2019 will be 862, with 10 more rigs being added, noted the weekly report by energy services firm Baker Hughes.

“We expect U.S. crude oil prices to be in the range of $50-$60 per barrel in 2019 and about $10 more per barrel for Brent,” Tortoise Capital Advisors said in its oil market outlook for 2019.

Gold at a high but steady

Gold prices were unchanged Monday, after hitting a seven-month high as hopes mounted that the U.S. Federal Reserve will retain the current interest rates.

Spot gold was firm at $1,302.58 per ounce by 0308 GMT, while U.S. gold futures climbed 0.3 percent to $1,301.90 per ounce.

“Gold is having a very positive macro stance in the sense the U.S. Fed is going to be more accommodative along with the European Central Bank,” noted Edward Moya, an analyst at Oanda.

Gold prices are rising amid gathering expectations on lower interest rates and end up reducing the scope of opportunity cost in holding the non-yielding bullion.

“The Fed meeting could be instrumental in triggering more dollar selling as well, as could positive Brexit developments, which is why we would stay long on gold going into the week,” explained analyst Edward Meir of INTL FCStone in a note.

International Business Times

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.