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Mid-East Tensions Sway Futures

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Pre-markets are fluctuating rather rapidly this morning, following a very successful regular day of trading Thursday, when major indexes rose between 7/8ths of a percent and 1 and 1/3, leading to fresh all-time highs in the first trading day of 2020. with a lack of newsworthy items over holiday season, the positive momentum regarding hopefulness of a U.S.-China trade deal, among other things, have kept markets buoyant.

This morning, however, we’re seeing a give-back of a percentage of those gains based on a geopolitical event that has added some uncertainty to the global stage. The U.S. Pentagon has announced it killed the top military general of Iran — an adversary of the U.S. for decades — in a bomb strike as the officer was visiting the neighboring country of Iraq. This comes only two days after President Trump had been promoting peace between the U.S. and Iran.

So while we’re currently seeing the Dow lower by 250 points at this hour in pre-market trading, the Nasdaq down 100 points and the S&P 500 down 32 — all of which are up from the lowest lows even earlier this morning, in reaction to lower markets worldwide — U.S. oil indexes are up notably: the West Texas Intermediate (WTI) is +3.9% and the Brent Crude is +4.1%. Again, these all may be temporary blips, depending on what happens next.

After the market opens this morning, we expect new ISM Manufacturing data for December. Analysts are looking for a read of 48.8% — closer to the 50% mark than the previous month’s 48.1%, but still at recessionary levels which we first saw emerge in August of last year. Yesterday, PMI Manufacturing for December came in at 52.4, an improvement over the previously released 52.2 and also above that 50-point mark.

Also new Construction Spending numbers for November are expected later this morning, with a consensus estimate of +0.5% swinging back from October’s negative read of -0.8%. Though construction has at best looked a bit stagnant over the past several months, this is at levels hovering around all-time highs.