Lower Open Likely For US Markets: Oil Price Up

Lower to modest open likely for the U.S. markets Wednesday after the main U.S. stock index futures looked subdued on Wednesday morning.

Investors’ attention moved to new developments at the U.S.-China trade talks and new corporate earnings results in the pipeline.

At 06:05 a.m. ET, Dow Jones futures were down 81 points and signaled a lower open by 90 points.

Futures on the S&P 500 and Nasdaq were also down.

Trade talks between American and Chinese negotiators will start next week, according to CNBC. The talks are starting nearly a month after the two presidents met in Japan’s Osaka during the G-20 summit.

Trade Representative Robert Lighthizer will lead the U.S delegation.

At the data front, manufacturing and services PMIs will be released at 09:45 a.m. ET, Wednesday and new home sales data will be published at 10:00 a.m. ET.

In the realm of corporate results, AT&T, LVMH and Boeing will report earnings before the bell. The Q2 earnings of Facebook, Tesla and Equifax will come after the bell.

Meanwhile, the International Monetary Fund (IMF) predicted that the global economy will expand 3.2 percent in 2019, down by 0.1 percent from its previous forecast.

The Washington-based IMF said ongoing concerns about the U.S.-China trade war, Brexit and lower inflation rates may affect the pace of growth.

Oil price rises

Oil prices moved up on Wednesday with support gained from the tensions over Iran, the fall in U.S. crude stocks and headway on Sino-U.S. talks. But weaker demand outlook kept a cap on broader gains.

Brent crude futures jumped up 21 cents, (0.3 percent) at $64.04 a barrel by 0719 GMT. The U.S. West Texas Intermediate crude jumped 0.5 percent at $57.05 a barrel.

The American Petroleum Institute reported that the U.S. crude stocks plunged more than expected in the week that ended on July 19.

The decline of 11 million barrels was almost three times what the analysts’ expected at 4 million barrels.

Asia stocks up

Stocks in the Asia Pacific traded higher on Wednesday on the back of new developments at the U.S.-China trade front.

A delegation from the U.S led by Trade Representative Robert Lighthizer would be going to Shanghai for meetings with Chinese officials to find an end to the long-drawn bilateral trade tussle.

“Markets have been waiting for so long for (a) face-to-face meeting and it looks like it’s going to happen now next week,” said Rob Subbaraman, head of global macro research at Nomura.

In mainland China, the Shanghai Composite added 0.8 percent while the Hang Seng index in Hong Kong added 0.42 percent. The ASX 200 in Australia soared 0.77 percent.

Japan’s Nikkei 225 closed 0.41 percent higher while the Topix index gained 0.4 percent. But South Korea’s Kospi fell 0.91 percent.

European stocks slipped on Wednesday’s trading, as market participants digested corporate earnings and awaited the rate cut plans of the European Central Bank.

The pan-European Stoxx 600 was down 0.2 percent by mid-morning.

Gold price up

Gold prices surged on Wednesday as tensions escalated in the Middle East and the appeal of safe-haven metal jumped.

However, reports of new progress in Sino-U.S. trade negotiations and a stronger dollar checked the yellow metal’s bigger gains.

Spot gold jumped 0.3 percent at $1,421.16 per ounce as of 0717 GMT, from the $1,413.80 in the previous session.

The U.S. gold futures were steady at $1,421.50 an ounce.

“We have geopolitical tensions in Iran, and we remain very cautious about the U.S.-China trade negotiations expected to begin next Monday because plenty of things remain unsolved between the two nations,” commented Margaret Yang Yan, the analyst at CMC Markets.