Dow futures rise 300 piasters; Powell’s speech, durable goods in focus

Dow futures rise 300 piasters;  Powell’s speech, durable goods in focus

Written by Peter Norse – U.S. stocks are expected to open higher on Tuesday, rebounding as investors seek bargains after recent sharp losses but remain concerned about future growth as the Federal Reserve tightens monetary policy.

At 07:00 ET (11:00 GMT), the contract was up 300 points or 1%, trading up 45 points or 1.2%, and up 150 points or 1.4%.

Major stock averages fell further on Monday, extending last week’s declines for the fifth consecutive day of losses. Leading stocks finished lower by more than 300 points, or 1.1%, and entered bear market territory, while broadband is down 1%, closing at its lowest level this year. Technology heavy stock closed down 0.6%.

Investors can’t stop worrying about the US economy entering a recession, insisting on taming at 40-year highs, no matter how much economic pain sharp increases in short-term interest rates cause.

The Cleveland Fed chief made this clear Monday, saying the US central bank needs to keep policy on hold for some time, and if something is wrong to be made, it is better for the Fed to do too much than do too little.

Goldman Sachs reduced shares below their weight in their global distribution over the next three months, saying, on a note, that “current levels of equity valuation may not fully reflect the relevant risks and may have to decline further to reach a market low.”

This week will see speeches by a range of Federal Reserve officials, including the Chairman, later Tuesday, while investors will also be watching for August and September for signs that monetary tightening is already having an impact on economic growth.

Oil prices rose on Tuesday, rebounding from their lowest levels since January as markets weighed the prospect of lower supply even with recession fears, monetary policy tightening and a rise in lackluster demand expectations.

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Major crude oil producers BP and Chevron said they had reduced production at some offshore oil platforms in the Gulf of Mexico in anticipation of Hurricane Ian.

In addition, the Organization of the Petroleum Exporting Countries and its allies, in what is known as OPEC+, meet next week and may pursue the modest production cut last month.

Its latest estimate of US crude stocks will be released later in the session, with another modest rise expected, which would be the fifth consecutive weekly rise if confirmed.

By 07:00 ET (11:00 GMT), futures were up 1.4% at $77.78 a barrel, while the contract was up 1.5% at $84.13. Both contracts fell by about $2 a barrel on Monday, adding to Friday’s 5% decline.

In addition, it rose 0.7% to $1,644.20 an ounce, while trading up 0.2% at 0.9627.

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