It’s been a choppy overnight session for US futures markets with the DOW at one point sitting around 100 points up on last night’s close, but as we look towards the opening bell, that downside momentum is once again very much in evidence. Rising oil prices are back in focus with terse words from the International Energy Agency over how the state of supply is reaching a critical point. Although Russia and Saudi Arabia are moving to boost output, it’s those Iranian trade sanctions from the US that are holding a lot of sway right now. As the global economy starts to decelerate, these high prices won’t be helpful.
There’s a slew of low level economic data out of the US before the opening bell, but one number that perhaps has the potential to shift sentiment is the mortgage application reading. Interest rates in the US are set to keep climbing for some time yet so any suggestion that consumer fatigue is already setting in could be something of the canary in the coal mine. It’s not going to be the catalyst for a wholesale sell off, but it could well add weight to the idea that a corrective phase for stocks is coming.
Ahead of the open we’re calling the DOW down 3 at 26428 and the S&P down 1 at 2879.
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Stocks recover as Fed Chair Powell says, "The job is not done"; Oil's raging bull and FX's roaring commodity currencies