US stock futures exhibit holding pattern during Labor Day

US stock futures bounced between small losses and small gains on September 6. Markets were closed for holidays due to Labor Day. Investors were trying to decipher the oil agreement signed between Saudi Arabia and Russia.  The DJIA or Dow Jones Industrial Average futures slid down four points. This change constitutes less than 0.1 percent. The DJIA went down to 18,476 post a little higher trading earlier in the day.

Up and down

The futures for S&P 500 index went down by 1.25 points. This is a little less than about 0.1 percent, going down to 2,176.75. In contrast, the index fot Nasdaq 100 dipped 8.50 points. This comes to about 0.2 percent. The final number was 4,786.75. The stock market in the United States was not available for regular trade due to the holidays. It will open as scheduled on September 6.

On September 2, the DJIA finished a little higher. The report on nonfarm payrolls were watched closely and it was observed that the US economy added fewer jobs in this period. This figure is below the initial estimation made for August. The disappointing data increased the expectation that the Federal Reserve will not raise the interest rates in the latter period of September. This could lead to a rally of riskier assets like stocks.

Oil influence

Oil prices, on September 5. were the cynosure of all eyes as Saudi Arabia and Russia consented to create a working group so that the oil market can be monitored. Recommendations can also be made to promote stability. Both countries said that there is a need to restrict huge supplies which resulted in the fall of oil prices. The price of oil dipped from over $100 in 2014 to go down below $30 during the earlier part of 2016. Khalid A. Al-Falih, the energy minister of Saudi Arabia and Alexander Novak, his counterpart in Russia, is scheduled to meet in October in Algeria. The two will meet again in November in Vienna. The purpose is to discuss cooperation as per the new agreement.

Oil prices which went up earlier went down again when market expectations from these two producers were not met. Markets hoped that there would be an agreement on the output cap. The West Texas Intermediate Crude went up 1.3 percent to touch $45.02 per barrel, while Brent increased one percent to touch $47.31 per barrel.

Leave a Comment