With all eyes on crude, following last night's mini flash crash which sent WTI lower by 3% from just above $45 to under $43 in under 10 minutes, equity markets, generally quiet overnight, have taken on a secondary importance ahead of today's key risk event, the April payrolls report (full preview here). In global equities, Asian and European stocks are lower, while S&P futures are little changed.
With much of Europe and Asia, including the U.K., France, Germany and China markets closed for Labor Day, Asian stocks and the dollar rose buoyed by news that Congress had reached a deal to keep the US government funded through the end of September. S&P futures are up 4 points or 0.2%. Oil declined as rigs targeting crude in the U.S. rose for a fifteenth week and output from Libya rebounded.
After two days of back to back triple digit gains in the Dow for the first time since the election, overnight the torrid rally has faded, with European shares and U.S. stock futures little changed ahead of Trump's big unveil of his much anticipated tax cut plan as investors seek new impetus for a flagging relief rally. And, if as some traders expect, the rally is likely to be reignited no matter what Trump announces today (although a less hyperbolic plan may in fact be more favorable for risk, as it makes Trump's plan more likely instead of being shot down by Congress).
The key economic releases this week are the durable goods report on Thursday and Q1 GDP on Friday. It iweek is the busiest week of earnings season, with 40% of S&P 500 equity cap reporting. In addition, there are a few scheduled speaking engagements by Fed officials this week.
European stocks rose amid earnings beats, offsetting weakness in the energy sector and easing investor concerns ahead of the weekend’s French election. Asian shares and U.S. futures also rise. The dollar weakens against the euro and most crosses, while crude oil rebounds following renewed OPEC chatter of a production cut, this time with Saudi Arabia seemingly onboard.