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Top 5 Things to Know in the Market on Thursday

EconomyJun 20, 2019 05:36AM ET
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© Reuters. - Here are the top five things you need to know in financial markets on Thursday, June 20:

1. Stocks, gold ride Fed-induced rally; 10-year Treasury yield dives

After the Federal Reserve signaled the possibility of policy easing later this year, waves rolled through financial markets worldwide.

A positive close on Wall Street looked set to remain in full swing on Thursday with Dow futures pointing to a triple-digit gain at the open. Asian shares joined the bullish sentiment, with China’s Shanghai Composite up 2.4%. Not to be left behind, European bourses jumped to six-week highs.

The prospect for lower rates drove spot gold to more than a five-year high, as the precious metal benefited from the reduced opportunity cost of holding the non-yielding asset, while weakness in the dollar, at three-month lows, made bullion more attractive for investors using foreign currencies.

The yield on the 10-year Treasury - which moves inversely to prices - was under pressure, diving below 2% for the first time since November 2016. Still off by more than 1%, it recovered to 2.001% by 5:30 AM ET (9:30 GMT).

Read more: FOMC Wrap: Fed No Longer ‘Patient,’ But Not As Impatient As Markets - Darrell Delamaide

2. BoE steps up to the plate as BoJ stands pat

Among a growing chorus of central bankers worldwide swinging to the dovish camp, voices from the Bank of England have been pushing the need to hike rates in the future.

Economists still expect the BoE to vote unanimously to hold rates steady at 7:00 AM ET (11:00 GMT), despite two policymakers who have recently spoke of the need for them to eventually move higher.

The Bank of Japan meanwhile announced its decision overnight to stand pat on monetary policy in a widely anticipated move. Not unlike the Fed, the BoJ did stress that, with escalating global economic risks, it was leaning more towards additional stimulus.

3. Oil spikes as attack downs U.S. drone

Oil prices jumped on Thursday after a report that a U.S. military drone was shot down by an Iranian missile, exacerbating Middle East tensions.

A U.S. official told Reuters that the drone was downed in international airspace over the Strait of Hormuz by an Iranian surface-to-air missile.

U.S. crude oil futures jumped to an intraday high of $55.86 on the news, its highest level since May 31.

4. Slack preps for debut as Oracle wows

Slack Technologies (NYSE:WORK) will be in the spotlight as its shares get listed directly on the New York Stock Exchange on Thursday. The NYSE set the reference price at $26 per share on Wednesday, suggesting that the workplace messaging app is valued at around $16 billion.

Shares of Oracle (NYSE:ORCL) jumped around 5% in pre-market trade on Thursday as the business software maker reported better-than-expected fiscal fourth quarter earnings.

Darden Restaurants (NYSE:DRI) and Kroger (NYSE:KR) will be among companies reporting ahead of the bell, while Canopy Growth (NYSE:CGC) and Red Hat (NYSE:RHT) release their quarterly earnings after the market close.

5. China confirms trade talks, highlights 3 issues

In the ongoing Sino-U.S. trade dispute, China’s Commerce Ministry confirmed on Thursday that top officials would restart talks, but placed the onus on Washington to create the necessary conditions for dialogue.

According to Beijing, the three obstacles include the removal of all the additional tariffs and disagreements over trade purchases and a "balanced" text for any deal.

U.S. President Donald Trump said on Tuesday that he would hold an “extended meeting” with Chinese President Xi Jinping at the G20 summit next week.

Top 5 Things to Know in the Market on Thursday

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MM River
MM River Jun 20, 2019 8:49AM ET
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Everybody in debt. Time to sell
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