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U.S. stock futures gain ground while investors focus on OPEC meeting

Published 25/05/2017, 12:03
© Reuters.  Wall Street futures point to higher open as markets focus on oil
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Investing.com – Wall Street futures pointed to a higher open on Thursday although most investors focused their attention on developments surrounding the meeting of the Organization of Petroleum Exporting Countries (OPEC) in Vienna.

The blue-chip Dow futures gained 71 points, or 0.34%, at 7:02AM ET (11:02GMT), the S&P 500 futures rose 7 points, or 0.29%, while the tech-heavy Nasdaq 100 futures traded up 20 points, or 0.35%.

While waiting for the official press conference tentatively scheduled for 11:00AM ET (15:00GMT) at the end of deliberations between OPEC and non-OPEC producing countries, several energy ministers had stated Thursday that the consensus was for extending the previously agreed production cuts for an additional nine months.

In November last year, OPEC and 11 other non-OPEC producers, including Russia, agreed to cut output by about 1.8 million barrels per day between January 1 and June 30.

Saudi Arabia’s energy minister Khalid al-Falih said OPEC and non-OPEC producers are likely to rule on extending production cuts for 9 months, but keep them at the same level as the consensus is that deeper cuts are not needed now.

Upon al-Falih’s remarks, oil prices turned sharply lower after being up more than 1% earlier. After a period of volatility with crude swinging back and forth between the red and the black, bearish sentiment had at last appeared to take hold.

U.S. crude futures fell 1.50% to $50.59 by 7:02AM ET (11:02GMT), while Brent oil lost 1.30% to $53.26.

Apart from the press conference, market players also looked ahead to the publication of weekly jobless claims at 8:30AM ET (12:30GMT) Thursday.

Investors will also pay attention to a couple of appearances from Federal Reserve (Fed) officials.

Fed governor Lael Brainard will participate in a panel on global economic issues at 10:00AM ET (14:00GMT), while St. Louis Fed president James Bullard will speak on U.S. economy and monetary policy after the market close at 10:00PM (2:00GMT Friday).

Minutes from the Fed's last policy meeting released on Wednesday showed that policymakers agreed they should hold off on raising interest rates until it was clear a recent U.S. economic slowdown was temporary, though most said a hike was likely coming soon. The minutes also showed that policymakers favored a gradual reduction of its massive $4.5 trillion balance sheet.

Futures traders are currently pricing in around a 78% chance of a hike at the Fed's June meeting, according to Investing.com’s Fed Rate Monitor Tool, while odds for a second rate hike by December were at about 38%.

In earnings news, Sears Holdings (NASDAQ:SHLD) reported lower quarterly losses than expected while revenue beat consensus.

Abercrombie & Fitch (NYSE:ANF), Best Buy Co Inc (NYSE:BBY) or Dollar Tree (NASDAQ:DLTR) were on tap to report before the open, while Costco (NASDAQ:COST) will release its numbers after the market close.

Elsewhere, European stocks hovered near their highest level in in 21 months in mixed trade, with the benchmark Euro Stoxx 50 up 0.16% by 7:14AM ET (11:14GMT) while Germany's DAX and London's FTSE 100 were down 0.15% and 0.06%, respectively..

Earlier, Asian shares climbed to two-year highs, with Japan's Nikkei ending up around 0.31%, while China's Shanghai Composite surged about 1.43%.

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