U.S. Stocks Set To Open Higher As Strong Data From China Supports World MarketsS&P 500 futures are gaining ground in premarket trading amid global market optimism.
China’s Economic Rebound Boosts Stocks Across The Globe
Unlike most other countries, China managed to contain the virus and its economic activity is increasing. Traders view China as a real-life example of what will happen in other economies when the virus is finally stopped.
Not surprisingly, strong economic data from China provided significant support to the world markets. S&P 500 futures have joined the trend and are gaining more than 0.5% in premarket trading.
Soon after the opening bell, U.S. will provide Industrial Production and Manufacturing Production reports for August. Industrial Production is expected to increase by 1% while Manufacturing Production is projected to grow by 1.2%. In case the reports show that the growth has stopped, the market may find itself under pressure.
Oil Prices Increase As Hurricane Sally Shuts Down 21% Of U.S. Gulf of Mexico Production
WTI oil prices shrugged off disappointing demand forecasts from OPEC and International Energy Agency (IEA) and moved closer to the $38 level as Hurricane Sally forced U.S. Gulf of Mexico producers to shut down oil production of about 400,000 barrels per day (bpd).
The potential negative impact from Hurricane Sally is lower than the blow from the recent Hurricane Laura, but U.S. oil producers did not have enough time to bring their oil production to pre-hurricane levels.
In this light, oil-related stocks may get some support during today’s trading session although it remains to be seen if any gains will be sustainable or oil stocks will continue their previous downside trend.
UK Moves Towards No-Deal Brexit
UK Prime Minister Boris Johnson achieved his first major victory on the way to breach the Brexit Withdrawal Agreement as the parliament voted for the proposed changes. This is just the first hurdle, and more debate is expected.
For now, the market reaction to the news is calm. However, a no-deal Brexit will likely present a serious problem for the world markets as it is expected to deal a short-term hit to the British economy at the time when it tries to recover from the blow dealt by the coronavirus pandemic.
Negotiations between UK and EU will likely intensify in the coming weeks so the Brexit story will continue to appear in the headlines and may have a serious impact on the markets.
For a look at all of today’s economic events, check out our economic calendar.