Oil falls sharply, global stocks slide, China’s economic data surpasses expectations and Fed Governor Brainard’s dovish remarks quells hopes of a rate hike. Here are four things to know in the market today, September 13.
1. Oil Falls Sharply
Oil prices were sharply lower on Tuesday after a warning from the International Energy Agency, which cautioned that the oversupply may carry over into next year due to slowing demand. The IEA previously predicted an end to the surplus mid-2016.
U.S. crude fell to $45.55 a barrel during mid-morning trade. Brent crude dipped to $47.87.
2. Global Stocks Lower
Global stocks were broadly lower, as investors remained focused on the Federal Reserve and tumbling oil prices.
Asian shares were mostly lower at closing despite China’s positive data.
Futures in the U.S. pointed to a lower opening. Dow futures were down over 100 points. In Europe, U.K. stocks were choppy as investors weighed data from the U.K. and Germany.
3. China Economic Data Beats Expectations
China reported that retail sales and factory output surpassed expectations in August.
Industrial production increased to an annualized rate of 6.3% last month. Analysts were anticipating a 6.1% increase.
Fixed investment climbed 8.1% in August, surpassing forecasts of an 8% increase.
Retail sales also beat expectations, with a rise of 10.6% versus the 10.2% increase that was expected.
4. Fed Governor Brainard in Focus
Federal Reserve Governor Lael Brainard’s dovish comments were in focus on Tuesday. Brainard asked for “prudence” in the timing of rate increases. Her comment was the last official remark ahead of the FOMC meeting next week.
Futures-implied probability of a September rate increase is at 20%. Market players are not convinced that the economy is ready for higher rates, but key figures in the finance industry have called on the Fed to raise rates sooner rather than later.
