U.S. Stock Market Future Indications, by MarketWatch - August 23, 2016: U.S. Stocks Set to Bounce Back as Investors Shrug of Oil Slide
U.S. stocks were set for another upbeat trading day on Tuesday, as investors shook off another steep slide in oil prices and instead looked ahead to Federal Reserve Chairwoman Janet Yellen’s speech at Jackson Hole.
An update on manufacturing activity and new-home sales data due Tuesday morning were also in the spotlight.
Futures for the Dow Jones Industrial Average YMU6, +0.20% gained 44 points, or 0.2%, to 18,563, while those for the S&P 500 index ESU6, +0.18% added 5.10 points, or 0.2%, to 2,186.50. Futures for the Nasdaq 100 index NQU6, +0.23% climbed 14.25 points, or 0.3%, to 4,826.
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The indicated gains follow lackluster action on Monday, when the mood turned cautious as oil prices tumbled. Hopes faded that members of the Organization of the Petroleum Exporting Countries will agree on a production freeze deal next month.
Investors were also playing a waiting game ahead of the Fed meeting of central bankers at Jackson Hole, Wyo. on Friday, where Yellen will be watched for hints on what’s next for interest rates.
“We could continue to see an element of caution in the markets in the lead up to this. Investors are still not buying a 2016 rate hike, even following Stanley Fischer’s comments over the weekend regarding the economy,” said Craig Erlam, senior market analyst at Oanda, in a note.
“The only question is whether she’ll strongly hint at a hike this year or indicate that holding off to early next year may be warranted, at which point markets would push the hike right back once again,” he added.
Economic news: Data out on Tuesday will be closely watched for any indication they weaken or strengthen the case for a Fed interest rate hike. The preliminary reading of the manufacturing purchasing managers index for August is due at 9:45 a.m. Eastern Time, and it is forecast to have eased to 52.8 from 52.9 in July, according to FactSet estimates.
At 10 a.m. Eastern, new home sales numbers for July are scheduled for release. They are expected to show an annual rate of 579,000, down from June’s seven-year high of 592,000.
There were no Fed speakers scheduled to speak on Tuesday.
Oil blues: Crude oil prices continued to slide, as Goldman Sachs said the oil market still looks weak and that prices are likely to stay in the $45-$50 range through next summer. The investment bank also said any OPEC production freeze would “likely prove self-defeating” because it could encourage producers outside the cartel to ramp up output.