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Morning markets: US shares flat as oil prices weigh

Friday, 2 Sep 2016 06:33:29 | Rebecca Hyam Rebecca Hyan

US shares were flat or modestly higher as energy companies slipped. (Chip East, file photo: Reuters)

It was a flat finish on Wall Street overnight, with weak oil prices and sluggish factory activity data limiting the markets' gains.

Markets at 8:25am (AEST):

  • ASX SPI 200 futures -0.2pc to 5,394
  • AUD: 75.5 US cents, 56.9 British pence, 78 Japanese yen, 67.5 euro cents, $NZ1.036
  • US: Dow Jones +0.1pc to 18,419, S&P 500 flat at 2,171, Nasdaq +0.3pc to 5,227
  • Europe: EuroStoxx -0.2pc to 3,017, FTSE 100 -0.5pc to 6,746, DAX -0.6pc to 10,534
  • Commodities: Iron ore -1pc to $US58.40/tonne, Brent crude -2.3pc to $US45.81/barrel, spot gold +0.4pc to $US1,314/ounce

A report by the Institute of Supply Management revealed factory activity in the US shrunk for the first time in six months in August, as new orders and production tanked.

Investors were also exercising caution, ahead of Friday's key monthly non-farm payrolls report in the US, which would likely help determine the timing of the Federal Reserve's next interest rate increase.

A further 2.6 per cent fall in crude prices weighed on energy stocks, but the technology sector outperformed.

"The concerns about the health of the US economy weighed on a number of sectors," noted IG's Evan Lucas.

"The weaker data read impacted rate hike expectations, which saw US financials have a tough session.

"While the further decline in the oil price saw energy stocks take another beating."

European markets also came under pressure overnight with London down around half a per cent.

The local share market is on track for a weak start, with the ASX SPI 200 futures trading lower.

The Australian dollar was worth around 75.5 US cents, having strengthened overnight.

West Texas crude oil was down to $US43.12 a barrel, with Tapis and Brent crude also lower.

Iron ore also eased further on Chinese spot markets, but gold was a little higher.

Today's agenda:

Australia:
  • Nothing

US:
  • Trade balance - 10:30pm (AEST)
  • Non-farm payrolls – 10:30pm (AEST)
  • Average weekly earnings – 10:30pm (AEST)
  • Federal Reserve's Jeffery Lacker speaks on interest rate benchmarks - 3:00am Saturday (AEST)

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