Stock markets appear to be heading downward for a third day in a row since North America returned from the Labor Day holiday. US Index Futures are down 0.1% to 0.9%, adding to yesterday’s US index losses of 0.6% to 1.0%. Overseas market action has been mixed with Hong Kong losing 1.3%, Sydney sliding 1.2%, Frankfurt falling 0.2% and London climbing 0.2%.
Investor confidence appears to have been rattled by a smaller than expected Chinese trade surplus with both imports and exports declining less than expected. An uptick in the inflation component of yesterday’s US ISM Service PMI report and signs of summer slowing across several regions in yesterday’s US Beige Book report haven’t helped matters either.
This month’s looming Fed meeting also appears to be casting a cloud over markets. With the usual pre-meeting blackout looming, four FOMC members are speaking today, along with Bank of Canada Governor Macklem and Reserve Bank of Australia Governor Lowe, both of whom may add more color to why they held interest rates steady this week and their respective monetary policy outlooks.
WTI Crude Oil is down 0.6% this morning but still trading well above $85.00/bbl despite API reporting a larger than expected weekly inventory drawdown last night (5.5 mmbbls vs street 1.3 mmbbls). Weekly DOE oil inventories (street -2.0 mmbbls) are due at 11:00 am EDT today.
