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Sep 14, 2016

U.S. Stock Market Future Indications, by MarketWatch: U.S. stocks Set to Rebound After Oil-Fueled Selloff - September 14, 2016

www.marketwatch.com

marketwatch.com
 
Sara Sjolin
 
Wall Street was set to recover slightly Wednesday from the prior session’s brutal selloff, with a rally in oil prices helping to send U.S. stock futures higher.

Futures for the Dow Jones Industrial Average YMZ6, +0.09%  rose 36 points, or 0.2%, to 18,045, while those for the S&P 500 index ESZ6, +0.11%  climbed 5.55 points, or 0.3%, to 2,127.75. Futures for the Nasdaq-100 index NQZ6, +0.19%  gained 14.50 points, or 0.3%, to 4,738.50.
All three benchmarks on Tuesday suffered big losses as a sharp slump in energy prices and uncertainty about the Federal Reserve’s plans for monetary policy spooked investors out of equities. The S&P 500 index SPX, -1.48%  ended the day 1.5% lower, while the Dow average DJIA, -1.41%  lost 1.4%, enough to erase their solid gains from Monday.
But on Wednesday, oil futures rebounded, pulling U.S. stocks higher with them ahead of the open. Crude oil CLV6, +0.71% climbed 0.9%, while Brent LCOX6, +0.55%  rose 0.7%.
The Energy Information Administration later on Wednesday releases its weekly inventory data, forecast to show a rebound in stockpiles.
Fed watching: However, traders were still hesitant of dipping their toes too deep into stocks ahead of the closely watched Federal Reserve meeting on Sept. 20-21.
“With the U.S. central bank now in blackout period ahead of the decision next Wednesday, there is little in the way of positive drivers helping underpin the market at this time,” said Michael Hewson chief market analyst at CMC Markets, in a note.
“On the plus side, we won’t have to listen to the arguments over whether Fed policymakers think they should or shouldn’t raise rates when they convene to meet next week,” he added. “Though it is clear that despite the rebound in the U.S. dollar over the past few days, it would be a major surprise if the Fed did anything at all next week.”
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The CME FedWatch Tool is showing a 15% probability of a rate increase next week. Goldman Sachs on Monday cut its September hike odds to 25% from 40% following dovish comments from Fed Governor Lael Brainard.
The economic calendar was relatively thin on Wednesday, with the only major release the August import-price index, due at 8:30 a.m. Eastern Time.
See: MarketWatch’s economic calendar
Movers and shakers: Shares of Monsanto Co. MON, -0.83% rose 2.7% in heavy premarket trade after reports German chemicals and drug giant Bayer AG BAYN, +3.10% BAYA, +1.98% raised its offer for the U.S. seeds major to $129 a share. An announcement of the takeover is expected later Wednesday. Bayer shares were up 0.8% in Frankfurt.
Philip Morris International Inc. PM, -1.70%  could also be active after the cigarette maker lifted its dividend by 2% to an annualized rate of $4.16 a share.
Other markets: The dollar DXY, -0.06%  dropped against most other major currencies, but staged a rally against the yen USDJPY, +0.14%  .
Metals rose across the board, with gold GCZ6, +0.22%  up 0.1% at $1,324.69.
Stocks in Asia closed mainly lower, while all major European stock markets advanced.