Decrease Open possible For US Markets: Oil, Gold Up

Lower open likely for the U.S markets Monday. This follows the slump in major index futures as a drop in Boeing shares hit the Dow Jones Industrial Average futures.

Dow futures were down 159 points showing a decline of 109 points at the open.

But S&P 500 and Nasdaq 100 were slightly up, indicating some nominal gains at the open.

Shares of Boeing fell more than 8 percent. The recent crash of an Ethiopian Airlines 737 Max 8 jet happened to be the second crash involving a Boeing plane in a span of five months.

Adding to the discomfiture was poor U. S Jobs data for February, China’s 20.7 percent fall in February exports and European Central Bank’s slashing of growth forecasts for the eurozone. All these raised specters of a global economic slowdown.

At the data front, Monday will see retail sales data and data on business inventories. From corporate earnings, Coupe Software and Stitch Fix will release their reports.

Why is Boeing important for Dow Jones?

Boeing is a mighty contributor to the strength of Dow Jones index.  According to Bespoke Investment Group. Boeing accounts for 30 percent of the Dow Jones Industrial Average’s year-to-date (YTD) gain of 11.5 percent.

Boeing’s shares zoomed 34 percent in 2019 and have added 812 points to Dow Jones index so far.

Oil prices up

Meanwhile, oil prices surged on Monday after Saudi oil minister Khalid al-Falih said no review is likely on OPEC supply cuts before June.  Another report highlighted falling drilling activity in the U.S.

Supply squeeze scares lifted the U.S. West Texas Intermediate (WTI) crude oil futures to $56.39 per barrel at 0323 GMT, up 0.6 percent from their last close. Brent crude futures per barrel price moved up to $65.04, up 0.5 percent.

 “Downward revisions in global growth forecasts by OECD and ECB have capped bullish gains,” noted Benjamin Lu of Singapore-based brokerage Phillip Futures.

Gold zooms

Gold price exhibited a revival trend. On Monday it moved up to a near one-week high as poor U.S. jobs data raised concerns of a global economic slowdown. 

At 0719 GMT, spot gold lost 0.1 percent to touch $1,296.62 per ounce. In the previous session, prices had breached the $1,300 ceiling first time in March. The U.S. gold futures slipped 0.2 percent to $1,296.70 an ounce.

Gold zoomed 1 percent on Friday with the biggest one-day gain since Feb. 19. 

 “Bullion’s appeal though dented by robust U.S. dollar prospects will stand tall amidst a decelerating global economy in 2019,” said Phillip Futures in a note, adding that gold price may hold firm in the weeks ahead as the United Kingdom is heading for the crucial Brexit.

Asian shares mixed

Asia Pacific markets showed mixed trends as investors looked cautious over a possible global economic slowdown.

In mainland China, Shanghai composite gained 1.92 percent while the Shenzhen composite was 3.89 percent high.

Japan’s Nikkei 225 showed mixed movements and wound up trading by adding 0.47 percent while the Topix index added 0.57 percent.