Coming off their worst week of 2019, U.S. stock futures are trading mixed ahead of the open. The Dow is flagging triple-digit declines as Boeing (BA) shares tumble, while the S&P 500 is flat and Nasdaq futures are up 0.3%. A mixed employment report on Friday also showed solid wage growth and a drop in unemployment, but the headline nonfarms payroll figure fell way short of expectations at a measly 20,000 jobs.
The Fed does “not feel any hurry” to change the level of interest rates again, according to Chair Jerome Powell, as the central bank watches how a slowing global economy affects local conditions in the U.S. He further told CBS’s 60 Minutes that current rates were “roughly neutral,” meaning they are neither stimulating nor curbing the economy. Asked directly if he thought President Trump could fire him, he said, “No. The law is clear that I have a four-year term, and I fully intend to serve it.”
Crude futures rose 1% to $56.63/bbl overnight, lifted by comments from Saudi oil minister Khalid al-Falih that an end to OPEC-led supply cuts was unlikely before June. OPEC+ has pledged to cut 1.2M bpd in crude supply since the start of the year to tighten markets and prop up prices. The forecast comes as the oil industry meets for the annual CERAWeek conference, a gathering of thousands of oil executives, traders, bankers and investors in Houston.
“The second wave of the U.S. shale revolution is coming,” the IEA said in its annual five-year oil outlook report. “This will shake up international oil and gas trade flows, with profound implications for the geopolitics of energy.” U.S. crude production is expected to account for 70% of the total increase in global production capacity by 2024, while total exports of crude and refined products should reach 9M barrels a day, surpassing Russia and rival Saudi Arabia.
Budget release… The White House forecasts the economy will grow about 3% annually over the next decade, though it expects a bigger near-term boost, with output rising 3.2% this year before declining to 3.1% in 2020, 3.0% in 2021 and 2.8% in 2026, according to projections viewed by the WSJ. The economy grew 3.1% last quarter – its highest rate in nearly four years and in line with projections – though there are concerns these figures will begin to slow after the effects of tax cuts and government spending wear off.
Theresa May’s government has declared Brexit talks as “deadlocked,” with ministers urging the EU to make a last minute concession to stop her Brexit deal from being thrown out by the U.K. parliament. Sterling investors are already pricing in a Brexit postponement, while the Bank of England has reportedly told some U.K. lenders to triple the amount of easy-to-sell assets they hold to help them weather any no-deal Brexit crisis. The pound -0.3% to $1.2977.
Germany’s government is clipping GDP forecasts again, according to Handelsblatt, trimming its in-house growth outlook for 2019 to just 0.8%, following an early cut from 1.8% to 1%. The news came even before this morning’s weak factory data, which showed industrial output sliding 0.8% M/M in January, intensifying the gloom hovering over the eurozone’s economic powerhouse.
Boiling point in Venezuela? Self-declared interim president, Juan Guaido, will call for a “state of national emergency” in a special session of parliament today amid ongoing power outages in the country. 16 of the nation’s 23 states continue to be completely without electricity, with at least 15 people dead and the private sector losing at least $400M due to the blackouts. Embattled President Nicolas Maduro has blamed U.S. sabotage for the outages.