Rate Outlook Murkier Amid Mixed Economic Data

(RTTNews) - The major U.S. index futures are pointing to a higher opening on Thursday, with sentiment reflecting modest strength following a deluge of domestic data. Among the economic data released ahead of the open, producer price inflation suggested tame inflationary environment. Retail sales were anemic, jobless claims rose less than expected and regional manufacturing activity was largely positive. The mixed piece of economic evidence would unlikely offer conclusive clue for the course of monetary policy. Meanwhile, the Bank of England stood pat, as recent evidences showed less damage to the economy from Brexit than feared. Although bargain hunting could support the markets, the next week's FOMC meeting could keep the mood muted. U.S. stocks squandered much of their early gains before ending Wednesday's session mixed. The major averages opened higher but reversed course, grazing the unchanged line. Renewed buying pushed the averages higher but after peaking in late morning trading, the averages gave back their gains over the course of the day, ending mixed. The Dow Industrials ended down 31.98 points or 0.18 percent at 18,035 and the S&P 500 Index closed 1.25 points or 0.06 percent lower at 2,126, while the Nasdaq Composite added 18.52 points or 0.36 percent before ending at 5,174. Among the sectors, airline and oil stocks came under selling pressure, but biotechnology and semiconductor stocks gained ground. Twenty-two of the thirty Dow components closed lower for the session, while eight stocks advanced. American Express (AXP), IBM (IBM) and Chevron (CVX) fell steeply. On the other hand, Apple (AAPL) rallied 3.59 percent and Caterpillar (CAT) added close to 1 percent. On the economic front, the Labor Department reported that import prices edged down 0.2 percent month-over-month in August, marking the first drop since February. Annually, import prices were down 2.2 percent. Excluding fuel, import prices were unchanged compared to the previous month. Fuel prices declined 2.1 percent, dragged down by lower petroleum prices. Export prices fell a steeper 0.8 percent following a 0.2 percent increase in July. Economists expected a more modest 0.1 percent drop . Currency, Commodity Markets Crude oil is rising $0.14 to $43.72 a barrel. The October futures ended the previous session down $1.32 at a nearly 2-week low of $43.58 a barrel.

The drop seen in the previous session came following the release of the weekly petroleum status report for the week ended September 9th, which showed that crude oil stockpiles fell by 0.6 million barrels to 510.8 million barrels. Stockpiles were still at historically high levels for this time of year.

However, distillate inventories rose by 4.6 million barrels and were above the upper limit of the average range for this time of the year. Gasoline inventories increased by 0.6 million barrels last week and were well above the upper limit of the average range.

Refinery capacity utilization averaged 93 percent over the four weeks ended September 9th compared to 93.1 percent for the four weeks ended September 2nd.

Gold futures are currently trading at $1,324.40 an ounce, down $1.70 from the previous session's close of $1,326.10 an ounce. On Wednesday, gold snapped a 5-session losing streak and rose $2.40. On the currency front, the U.S. dollar is trading at 102.49 yen compared to the 102.43 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.1247 compared to yesterday's $1.11250. Asia The major Asian markets ended mixed, although the Chinese, South Korean and Taiwanese markets remained closed for a public holiday. The Japanese market sank under the weight of a rising yen, while the Australian and Hong Kong markets advanced. Japan's Nikkei 225 Index opened lower and declined steadily until the mid-session. Thereafter, the index went about a consolidation run before ending down 209.23 points or 1.26 percent at 16,405, its lowest level since August 26th. A majority of stocks retreated, with export and real estate stocks among the worst performers of the session. The resource, utility, financial, food and housing spaces also saw weakness. Australia's All Ordinaries Index spent the better part of the session below the unchanged line but turned positive in late trading. A steady ascent thereafter saw the index end 10.50 points or 0.20 percent higher at 5,337. Financial and material stocks saw strength, helping to offset weakness in the industrial, utility and energy spaces. Hong Kong's Hang Seng Index closed at 23,336, up 144.95 points or 0.63 percent. On the economic front, data released by the Australian Bureau of Statistics showed that the Australian economy unexpectedly lost jobs in August. The economy shed 3,900 jobs, belying expectations for an addition of 15,000 jobs. However, much of the negativity was centered in the volatile part time category, while full time employment increased during the month. The jobless rate held steady at 5.6 percent compared to estimates of 5.7 percent. A separate report showed that new motor vehicle sales in Australia rose a seasonally adjusted 0.1 percent month-over-month in August following a 1.3 percent drop in July. Annually, new motor vehicle sales rose 2.9 percent. Europe European stocks are showing volatility amid the announcement of the Bank of England's monetary policy meeting. The U.K. market is, however, higher post the announcement. This major averages in the region had retreated in each of the past 5 sessions. In major corporate news, U.K. retailer Next reported a 1.5 percent drop in pre-tax profits for the half year, although the drop was not as bad as some analyst expected. However, the company noted full-price sales were weak in July. U.K. supermarket chain WM Morrison reported better than expected first half results. Swedish retailer H&M'S sales growth for August was weak, with hot weather blamed for the softness. On the economic front, the Bank of England policymakers voted unanimously to keep its key interest rate and asset purchases unchanged, while signaling that the rate could be cut further to its lower bound of just above zero, as recent data suggested that the economic shock caused by "Brexit" may be less severe than expected earlier.

The Monetary Policy Committee retained its key bank rate at a record low 0.25 percent, the government bond purchases at 435 billion pounds, and corporate bond purchases at 10 billion pounds, all three in a 9-0 vote. The decision was in line with economists' expectations.

Two policymakers, Kristin Forbes and Ian McCafferty, who had opposed increasing gilt purchases last month, still did not find the need for such a measure. However, they chose not to vote against the scheme this month, considering the potential cost to the economy of immediately reversing the ongoing program.

the Swiss National Bank held its negative deposit rate steady at -0.75 percent yet again and also said it would remain active in the forex market to defend the franc. The target range for the 3-month LIBOR was also unchanged at -1.25 percent to -0.25 percent. The U.K. Office for National Statistics reported that U.K. retail sales fell 0.2 percent month-over-month in August, reversing the 1.9 percent increase in July. Economists expected sales to decline by 0.4 percent. Excluding auto fuel, retail sales edged down 0.3 percent. Inflation data released by Eurostat showed that eurozone annual inflation came in at 0.2 percent, in line with estimates and the flash reading. A separate report showed that the trade surplus of the euro area fell unexpectedly in July, as exports fell 1.1 percent month-over-month, while imports rose 1.4 percent. U.S. Economic Reports First-time claims for U.S. unemployment benefits rose by less than expected in the week ended September 10th, according to a report released by the Labor Department.

The report said initial jobless claims inched up to 260,000, an increase of 1,000 from the previous week's unrevised level of 259,000. Economists had expected jobless claims to rise to 265,000. Wholesale prices in the U.S. held steady in the month of August, according to a separate report released by the Labor Department. The Labor Department said its producer price index for final demand was unchanged in August after falling by 0.4 percent in July. Economists had expected prices to inch up by 0.1 percent.

Excluding food and energy prices, core producer prices ticked up by 0.1 percent in August following a 0.3 percent drop in July. The modest increase in core prices matched economist estimates.

Retail sales in the U.S. saw a modest decrease in the month of August, the Commerce Department revealed in a report. The Commerce Department said retail sales dipped by 0.3 percent in August following a revised 0.1 percent uptick in July. Retail sales had been expected to remain unchanged.

Excluding a drop in auto sales, the report said retail sales edged down by 0.1 percent in August after falling by 0.4 percent in July. Economists had expected ex-auto sales to rise by 0.3 percent. Manufacturing activity in the mid-Atlantic region showed a notable improvement in growth in September, according to new survey results released.

The Philadelphia Federal Reserve said its index of general business conditions came in at 12.8 for September. This was up notably compared a mark of 2.0 for the previous month.

Economists had expected the figure to remain close to August's result, with the consensus estimate sitting at 2.0. New orders showed growth again in September after declining in the previous month. The index for this measure rose to positive 1.4 compared to negative 7.2 in August.

Manufacturing activity in New York State continued to contract in September, though the rate of deterioration eased slightly compared to August. This according to new survey results released Thursday. The New York Federal Reserve's Empire State Index came in at negative 1.99 for September. This compared to a mark of negative 4.21 in the previous month. Economists had projected a reading of negative 1.00. At 9:15 am ET, the Federal Reserve is set to release its industrial production report for August. The consensus estimate calls for a 0.2 percent month-over-month drop in industrial output. Manufacturing output is estimated to have fallen 0.3 percent. Industrial output was up was up 0.7 percent on a monthly basis in July versus expectations of a 0.3 percent increase and June's downwardly revised 0.4 percent increase. Manufacturing output growth of 0.5 percent also beat estimates for 0.2 percent growth. Vehicle production boosted the headline number. Mining output rose 0.7 percent. Capacity utilization edged up 0.5 percentage points to 75.9 percent. The Commerce Department is due to release its business inventories report for July at 10 am ET. Economists expect a 0.1 percent month-over-month increase in business inventories. In June, business inventories rose 0.2 percent, with retail and wholesale inventories lending support. However, business sales soared 1.2 percent. Accordingly, the business inventories to sales ratio fell to 1.39. Stocks in Focus Apogee Enterprises (APOG) reported better than expected second quarter results and issued positive full year earnings guidance. CLARCOR (CLC) reported above-consensus third quarter earnings, but its revenues were shy of estimates. The company's full year guidance was also weak. Two FDA advisory committees recommended by a majority vote to remove the boxed warning regarding serious neuropsychiatric adverse events from Pfizer's (PFE) Chantix labeling. This follows the submission of a sNDA for updating the labeling based on the safety and efficacy outcomes of a trial named EAGLES. RR Donnelley (RRD) announced that its board has approved the spin-off of LSC Communications, a print services and office products company, and Donnelley Financial Solutions, a financial communication and data services company. This will lead to 3 distinct publicly traded companies. RR Donnelley shareholders will receive 1 share of the two companies proposed to be spun-off for every 8 RR Donnelley shares they hold.