Investing.com - Here are the top five things you need to know in financial markets on Thursday, October 18:
1. Fed to push ahead with rate hikes; jobless claims, Philly Fed on tap
Markets will continue to digest the minutes from the latest meeting of the Federal Reserve while looking ahead to data on the U.S. labor market and a regional manufacturing survey to be released later on Thursday.
The Fed minutes showed that policymakers had some doubts about the future path of the economy but were united on the need to hike rates in September and anticipated continuing with plans to gradually increase interest rates with one more this year and perhaps an additional three in 2019.
In economic indicators to be released Thursday, the weekly jobless claims numbers come in at 8:30 AM ET (12:30 GMT).
Economists expect that claims for first-time unemployment benefits dipped slightly to 211,000 from 214,000 the week before.
Labor numbers have been consistently good, with this week’s latest JOLTs report showing job openings at a record level.
At the same time the Philadelphia Fed’s manufacturing index is issued. Manufacturing activity is forecast to have dipped in October to a measure of 19.7.
2. Travelers set to release earnings as reporting season revs on
Earnings season remained in focus for investors as around 10% of S&P firms have rolled out numbers for the third quarter.
As of Wednesday’s close, 54 S&P companies have published results with 81% beating profit estimates with growth of 26.1% and 68% topping consensus on sales with growth of 7.9%, according to The Earnings Scout.
Dow component Dow component Travelers (NYSE:TRV) will be the main focus for Thursday’s session, while Blackstone (NYSE:BX), Bank of NY Mellon (NYSE:BK), Philip Morris (NYSE:PM), PPG Industries (NYSE:PPG) and Nucor (NYSE:NUE) will also report before the opening bell.
After the close, results are expected from American Express (NYSE:AXP), PayPal (NASDAQ:PYPL), E-Trade (NASDAQ:ETFC), Intuitive Surgical (NASDAQ:ISRG), and Skechers (NYSE:SKX).
3. U.S. futures point to lower open amid WTO warnings, higher bond yields
U.S. futures pointed to a lower open on Thursday as the World Trade Organization warned of the economic risks of trade wars, bringing back into focus the reigning dispute between the U.S. and China, while heightened expectations for future rate hikes on the back of the Fed minutes pushed U.S. bond yields higher.
“Without action to ease tensions and recommit to cooperation in trade, we could see serious harm done to the multilateral trading system,” WTO director-general Roberto Azevedo said. “The long term economic consequences of this could be severe.”
At 5:50 AM ET (9:50GMT), the blue-chip Dow futures fell 60 points, or 0.23%, S&P 500 futures lost 7 points, or 0.26%, while the Nasdaq 100 futures traded down 22 points, or 0.30%.
Earlier, Chinese stocks lead losses in Asia with the Shanghai Composite ending nearly 3% lower.
Elsewhere, European shares showed mixed trade as traders kept eyes on developments over Brexit negotitations.
4. Oil continues lower as inventory build weighs
Oil continued to trade lower on Thursday, adding to losses of nearly 3% in the prior session, as a surprise rise in U.S. stockpiles weighed on prices, while geopolitical tensions, the upcoming deadline for U.S. sanctions on Iran and continuing concern over production have all been factors involved in recent market volatility.
U.S. crude stocks rose 6.5 million barrels last week, the U.S. Energy Information Administration said on Wednesday, the fourth straight weekly build and almost triple what analysts had forecast.
U.S. crude oil futures fell 0.96% to $69.08 by 6:02 AM ET (10:02 GMT), while Brent oil traded down 1.04% to $79.22.
5. Chinese yuan hits January 2017 low
The Chinese yuan moved slightly higher against the dollar on Thursday, after hitting its lowest level since January 2017 overnight, despite the fact that the U.S. Treasury avoided labeling the world’s second largest economy as a currency manipulator.
In its semiannual forex policy report, the Treasury Department declined to label China or any other trading partner of the U.S. as currency manipulators, but it noted that Chinese currency practices were a source of "particular concern".
The Treasury also added that Beijing and some other countries including Germany, Japan and India have been put on a watch list.
U.S. Treasury Secretary Steven Mnuchin had said over the weekend that currency issues would be a necessary component of any trade discussions between the U.S. and China.