US Stock Futures Rattled by North Korea Tensions
- Author: Zachary Reyes Sep 07, 2017,
Sep 07, 2017, 12:49
Investors are yet to see signs that the geopolitical tensions between the United States and North Korea, which surged after the North's sixth nuclear test on Sunday, would ease any time soon. USA shares were poised for a flat opening, with Dow futures and the broader S&P 500 futures unchanged.
With tougher sanctions on North Korea looking to be the most likely scenario, markets will discount the possibility of war, but the risk-off mode may continue to persist a little longer as there are more missile launches on the horizon.
Wall Street's major indices are holding their ground even in the face of the surprise resignation of USA central bank vicepresident Stanley Fischer with even simmering worries about North Korea and Hurricane Irma failing to undermine investor sentiment. The Communist regime sparked global outcry over the weekend after it tested a hydrogen bomb it says can fit on an intercontinental ballistic missile.
"So unless the global response to this test raises the probability of a military strike or North Korean regime collapse (both unlikely), this time may play out similarly", it said.
Meanwhile, US President Donald Trump was reported to be considering his military options.
Goldman said it maintains its end-of-year gold price forecast of $1,250 per ounce barring a substantial escalation in North Korea. Pyongyang has seemed to make it a habit recently to be pushing for firsts as the missile which flew over Japan was an unusual event considering that North Korea has typically been extremely careful not to make any overtly aggressive moves outside of its rhetoric.
There were some sharp moves in commodity markets. It rose to $18.09 a day earlier, the most since April 21. The major indices opened lower on Tuesday before widening their losses in afternoon trade.
Low inflation could put a dent in the Federal Reserve's rate hike plans.
On Friday, after a USA government report showed employers added fewer jobs in August than expected, traders held to expectations that the Federal Reserve would wait until the middle of 2018 before raising rates. Brainard also offered her support for the Fed's plan to unwind its trillion-dollar balance sheet.
Shares in United Technologies Corp (UTC) fell 2.5% after the company, which makes Pratt & Whitney jet engines, agreed to buy airline parts maker Rockwell Collins for $30bn (£23bn). (COL) for $23 billion, or $140 a share, in the biggest deal in the history of aerospace.
The pan-European FTSEurofirst 300 index .FTEU3 rose 0.10 percent and MSCI's gauge of stocks across the globe .MIWD00000PUS gained 0.15 percent. The deal is expected to close in the third quarter of 2018.
That being said, gold's tremendous run higher hasn't taken a breath.