Top 5 Things to Know In the Market on Wednesday August 24th 2016

 

Here are the top five things you need to know in financial markets on Wednesday, August 24:

1. Oil down on bearish bets for inventory data

Oil traded sharply lower on Wednesday after a surprise massive build in crude stockpiles was reported by the American Petroleum Institute (API).

After markets closed Tuesday, API said that U.S. oil inventories increased by a surprising 4.46 million barrels in the week ended August 19, compared to expectations for a draw of about 500,000.

The U.S. Energy Information Administration will release its weekly report on oil supplies at 14:30GMT, or 10:30AM ET, Wednesday amid expectations for a withdrawal of 455,000 barrels.

U.S. crude oil futures slumped 1.62% to $47.32 at 9:59AM GMT, or 5:59AM ET, whileBrent oil traded down 1.02% to $49.45.

2. Housing data ahead but markets look forward to Yellen

On the data front Wednesday, traders will gauge the health of the U.S. housing market with the June house price index out at 13:00GMT, or 9:00AM ET, following by July existing home sales at 14:00GMT, or 10:00AM ET.

However, market participants were busy taking positions ahead of Federal Reserve (Fed) chief Janet Yellen’s speech at the Jackson Hole Economic Symposium on Friday.

Investors will pay close attention to any hint at the future timing of an interest rate hike with odds at 18% for the September meeting and 48.8% in December. The probability does not currently pass the 50% threshold until the February 2017 meeting, according to Investing.com’s Fed Rate Monitor Tool.

3. Dollar moves higher on Jackson Hole expectations

The dollar edged forward against major rivals on Wednesday while waiting for the Jackson Hole speech.

Hawkish comments by Fed officials, most recently vice chair Stanley Fischer, raised speculation that Yellen could reveal a more optimistic outlook, dampening her generally dovish stance and leaving the door open to a possible rate hike in September.

The U.S. dollar index was last up 0.11%, at 94.60, by 10:00AM GMT, or 6:00AM ET.

4. Short positions in the VIX at all time high

Despite recently marking record highs, U.S. stocks continued to trade a tight range amid low volume and volatility.

As of Tuesday, the S&P 500 hadn’t make a 1% in either direction since July 8, and, since then, had only made a move surpassing half a percent on five occasions, making the current run the least volatile period in more than two decades.

Bank of America Merrill Lynch pointed to the collapse in expected volatility as measured by the VIX, the measure of market’s expectations for stock market volatility over the next 30-day period.

These analysts explained that the fall in the VIX, which has been below 15 since July 5, was due to the fact that speculative short positions in the measure had hit an all-time high.

5. Global stocks mixed in cautious trade without data

Asian stocks were mostly lower on Wednesday as investors took profit ahead of Yellen’s speech, though Japan managed to escape losses on the back of a weaker yen.

After a lower open, European stocks mostly turned higher in midday trade with the benchmark Euro Stoxx 50 up 0.5%, though losses in mining stocks kept London’sFTSE 100 in the red.

Meanwhile, U.S. futures continued its holding pattern, trading flat on Wednesday. At 10:01AM GMT, or 6:01AM ET, the blue-chip Dow futures gained 5 points, or 0.03%,S&P 500 futures rose 2 points, or 0.07%, while the Nasdaq 100 futures traded up 4 points, or 0.09%.

 

Source: Investing.com

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