Upbeat Economic Data May Lead To Strength On Wall Street

Upbeat Economic Data May Lead To Strength On Wall Street

The major U.S. index futures are pointing to a higher opening on Wednesday, with stocks poised to add to the gains posted in the previous session.

Upbeat economic data may contribute to early strength on Wall Street, although trading activity may be somewhat subdued ahead of the release of the closely watched monthly jobs report on Friday.

U.S. stocks rose Tuesday, with the 200-point swing in the Dow Jones Industrial Average representing the biggest single-day comeback of the year.

Markets calmed after some initial weakness brought on by North Korea’s missile launch over Japan. President Donald Trump said in a statement Tuesday that “all options are on the table” for dealing with North Korea.

The Dow Jones industrial average erased earlier losses to end 56.97 points higher at 21,865.37, with industrials like United Technologies and Boeing fueling the rise. The index fell as much as 134.82 points earlier in the session.

The Nasdaq composite rose 0.3 percent at 6,301.89 after Apple hit a record high. The S&P 500 added 0.1 percent to 2,446.30.

Commodity, Currency Markets

Crude oil futures are falling $0.37 to $46.07 a barrel after slipping $0.13 to $46.44 a barrel on Tuesday. Gold futures, which rose $3.60 to $1,318.90 an ounce in the previous session, are sliding $5.60 to $1,313.30 an ounce.

On the currency front, the U.S. dollar is trading at 110.40 yen compared to the 109.71 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is valued at $1.1907 compared to yesterday’s $1.1972.

Asia

Asian stocks posted broad-based gains on Wednesday as the concerns triggered by North Korea’s missile firing eased somewhat.

North Korea said the launch of an intermediate-range ballistic missile over Japan was to counter U.S. and South Korean military drills.

While U.S. President Donald Trump offered a surprisingly subdued response to the missile launch, the U.N. Security Council has condemned the missile provocation but stopped short of imposing new sanctions or other specific measures to rein in Pyongyang.

Chinese stocks ended little changed as losses in the banking sector offset gains by airline stocks in the wake of a resurgent yuan, which hit a 14-month high against the U.S. dollar on stronger institutional and corporate dollar sales.

The benchmark Shanghai Composite Index edged down 2.23 points or 0.1 percent to 3,362.99, while Hong Kong’s Hang Seng Index jumped 329.60 points or 1.2 percent to 28,094.61.

Gains by exporters on the back of a weaker yen and solid retail sales data helped Japanese shares recover all of the previous session’s losses.

The Nikkei 225 Index climbed 143.99 points or 0.7 percent to 19,506.54 after hitting a four-month low on Tuesday. The broader Topix index closed 0.6 percent higher at 1,607.65.

Hitachi and Sony jumped around 3 percent each, Panasonic gained 0.8 percent and Canon rose 0.6 percent. Dunlop Sports soared as much as 15 percent on news that it would merge with Sumitomo Rubber Industries.

Retail sales in Japan jumped a seasonally adjusted 1.1 percent month-on-month in July, the Ministry of Economy of Trade and Industry said. That beat forecasts for an increase of 0.3 percent after a 0.2 percent gain in June.

Australian shares finished on a flat note as Telstra shares plunged and data on construction activity and building approvals painted a mixed picture of the economy.

Telstra, the country’s biggest telecommunications company, slumped 6.3 percent as shares went ex-dividend and the company dropped a plan to securitize payments from the National Broadband Network.

Ramsay Health Care tumbled 5.2 percent despite the company meeting its full-year guidance. Rising copper and nickel prices helped lift mining stocks, with OZ Minerals rising 1.3 percent and BlueScope Steel adding 2.9 percent.

Europe

European stocks have risen notably on Wednesday as the euro slid against the dollar and investor jitters over North Korea eased somewhat.

Investors were relieved by U.S. President Donald Trump’s measured response to North Korea’s missile launch and comments from the rogue state’s leader Kim Jong Un that the launch of an intermediate-range ballistic missile over Japan was to counter U.S. and South Korean military drills.

While the U.K.’s FTSE 100 Index is up by 0.5 percent, the French CAC 40 Index is up by 0.6 percent and the German DAX Index is up by 0.7 percent.

Swiss insurer Baloise has rallied after strong first-half results. Similarly, oilfield services company Petrofac has surged higher in London after announcing its half-year results.

French medical equipment supplier Biomerieux has jumped more than 8 percent after raising its sales and operating income targets for 2017.

Bertrandt hassoared as the German engineering specialist reported a slight increase in revenues for the first nine months of the year.

Meanwhile, Randgold Resources and Fresnillo have moved lower as gold prices have fallen from a more than nine-month high.

U.S. Economic Reports

Private sector employment in the U.S. increased by more than anticipated in the month of August, according to a report released by payroll processor ADP.

ADP said private sector employment jumped by 237,000 jobs in August following an upwardly revised increase of 201,000 jobs in July.

Economists had expected employment to climb by 185,000 jobs compared to the addition of 178,000 jobs originally reported for the previous month.

A separate report released by the Commerce Department showed U.S. economic activity increased by more than previously estimated in the second quarter.

The Commerce Department said gross domestic product jumped by 3.0 percent in the second quarter compared to the previously estimated 2.6 percent growth.

Economists had expected a much more modest upward revision in the pace of GDP growth in the quarter to 2.7 percent.

At 9:15 am ET, Federal Reserve Governor Jerome Powell is due to deliver a speech entitled “The Role of Boards at Large Financial Firms,” at the breakfast presentation during the Large-Bank Directors Conference hosted by the Federal Reserve Bank of Chicago.

The Energy Information Administration is scheduled to release its report on oil inventories in the week ended August 25th at 10:30 am ET. Crude oil inventories are expected to drop by 1.9 million barrels.

by RTT Staff Writer

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