Investing.com - Here are the top five things you need to know in financial markets on Tuesday, September 5:
1. Global stocks mixed as North Korea still weighs
Global equities traded mostly higher on Tuesday, with most indices brushing off geopolitical tension as U.S. traders come back to their desks after the Labor Day holiday.
American stocks looked set to catch up with global counterparts that registered losses on Monday after North Korea conducted its sixth and most powerful nuclear test to date over the weekend. U.S. futures registered slight losses on Tuesday as stocks elsewhere recovered from the prior day’s risk-off sentiment. At 6:05AM ET (10:05GMT), the blue-chip Dow futures lost 49 points, or 0.22%, S&P 500 futures fell points, or 0.26% while the Nasdaq 100 futures traded down 11 points, or 0.18%.
Elsewhere, European bourses traded higher as worries over North Korea took a backseat to deal-making and some investors opted to buy the dip. At 6:06AM ET (10:06GMT), the European benchmark Euro Stoxx 50 gained 0.29%, Germany’s DAX rose 0.77%, while London's FTSE 100 inched up 0.07%.
Earlier, Asian shares closed mixed, with Shanghai ending in the black after positive economic data, while Japan’s Nikkei 225 and South Korea’s KOSPI remained cautious ahead of speculation that Pyongyang is making preparations for the possible launch of another intercontinental ballistic missile with speculation pointing to September 9.
2. Dollar holds steady ahead of Fed speakers
The dollar held steady against the other major currencies on Tuesday, as ongoing tensions with North Korea continued to dominate market sentiment and investors looked ahead to a string of appearances from Federal Reserve officials in the hopes to garner clues over the future path of U.S. monetary policy.
Fed governor Lael Brainard will speak to the Economic Club of New York at 7:30AM ET (11:30GMT).
Minneapolis Fed president Neel Kashkari and Dallas Fed chief Robert Kaplan will participate in separate moderated Q&As at 1:10PM ET (17:10GMT) and 7:00PM ET (23:00GMT), respectively.
Also on the docket, investor will digest the release of July factory orders at 10:00AM ET (14:00GMT).
Ahead of these calendar appointments, the U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, edged forward just 0.03% at 92.60 by 6:07AM ET (10:07GMT).
3. Oil gaines as refineries come back on line
Crude prices moved higher on Tuesday, as demand picked up and U.S. refineries started to resume operations.
Oil refineries, pipelines and shipping channels across Texas and Louisiana began a gradual return of operations after storm system Harvey made landfall in the heart of the U.S. energy industry more than a week ago.
U.S. crude oil futures gained 1.10% to $47.81 at 6:08AM ET (10:08GMT), while Brent oil traded up 0.27% to $52.48.
Market participants will eye fresh weekly information on U.S. stockpiles of crude and refined products on Wednesday and Thursday to weigh what the impact of Harvey was on supply and demand.
The reports come out one day later than usual due to the U.S. Labor Day holiday on Monday.
4. Bitcoin continues to slump on China ban
Bitcoin and other leading cryptocurrencies continued to slump on Tuesday, pulling further away from record highs as U.S. traders got back to their desks, after China banned individuals and organizations from raising funds through initial coin offerings, saying the practice constituted illegal fundraising.
Traders showed concern over further information out Tuesday from Chinese financial news outlet Yicai that the world’s second largest economy is poised to even further tightening of rules on virtual currencies.
Bitcoin dropped to $4,159.9, down $40.50, or around 1% by 6:09AM ET (10:09GMT). The digital currency rallied to an all-time high of $4,911.80 over the weekend.
Ethereum, Bitcoin's closest rival in terms of market cap, attempted to recover from the prior day’s nearly 16% slide. At 6:11AM ET (10:11GMT), the cryptocurrency was little changed at $295.92. It briefly rose to a record peak of $394.78 on Saturday.
5. Global service sector activity remains robust
China’s private sector is growing at its fastest rate in six months, according to new data released overnight.
Data firm Caixin reported that it services purchasing manager’s index (PMI) rose to 52.7, the fastest rate since February, beating expectations for a smaller increase to 51.8.
In Europe, the euro zone reading dropped to a seven-month low in August, but remained at level corresponding with a healthy expansion in activity.
The UK also showed a slightly worse-than-expected performance with activity dropping to an 11-month low. However, the reading of 53.2 remained comfortably above the 50 point dividing line between expansion and contraction.
Stateside, traders will have to wait for the publication of the ISM non-manufacturing PMI for August that will be released on Wednesday.