Investing.com - Here are the top five things you need to know in financial markets on Wednesday, August 30:
1. ADP employment data in spotlight
Investors will keep a sharp eye on the August nonfarm employment change data released by private payroll processor ADP at 8:15AM ET (12:15GMT) Wednesday.
Forecasts for the ADP report are for the creation of 183,000 private jobs in August in what would be an improvement of 5,000 posts from the previous month’s data.
Though not always a reliable reflection of the government’s official nonfarm payrolls report out on Friday, traders will track the data for indications that the U.S. labor market is maintaining solid growth with an eye on its implications for Federal Reserve policy.
2. North Korea concerns remain in focus, tensions ease
Markets are keeping tensions surrounding North Korea on their radar Wednesday though tensions appeared to have eased somewhat.
North Korean leader Kim Jong-Un called Tuesday's missile test a "meaningful prelude" to containing the U.S. territory of Guam.
The United Nations Security Council condemned the launch but did not seek to escalate sanctions against Pyongyang.
In the previous day's trade, markets worldwide were on edge following news that North Korea had fired a ballistic missile which had passed over Japan.
As U.S. President Donald Trump gave a relatively restrained statement, saying simply that “all options remained on the table”, U.S. stocks managed to recover from earlier losses on Tuesday to finish the day in the black.
3. Global stocks breathe sigh of relief, undergo reversals
Global stocks were broadly higher on Wednesday, taking their cue from a positive close in the prior session on Wall Street as concerns over U.S.-North Korea tensions appeared to ease.
In Asia, equities ended Wednesday mostly higher with Japan’s Nikkei 225 up around 0.7%, while South Korea’s Kospi managed gains of about 0.3%. China’s Shanghai Composite was an outlier as it dipped 0.05%.
European bourses were in a clear reversal on Wednesday as concerns over tensions between North Korea and the U.S. began to subside and demand for the riskier assets found fresh support. At 6:01AM ET (10:01GMT), the European benchmark Euro Stoxx 50 gained 0.34%, Germany’s DAX rose 0.42%, while London's FTSE 100 traded up 0.19%.
U.S. futures also pointed to a slightly higher open Wednesday in a continuation of the prior day’s gains. At 6:01AM ET (10:01GMT), the blue-chip Dow futures advanced 25 points, or 0.11%, S&P 500 futures inched up 1 point, or 0.04% while the Nasdaq 100 futures gained 8 points, or 0.13%.
4. Moody’s cuts U.S. growth forecast as Q2 GDP revision looms
In a global outlook published early Wednesday, Moody’s Investors Service lowered growth forecasts for the U.S. economy.
Specifically, the agency said it sees growth of 2.2% in 2017 for the American economy and 2.3% in 2018, down from 2.4% and 2.5%, respectively.
“The revisions in 2017 are a result of weaker performance in the first half of the year,” Moody’s explained.
“The lower growth forecast for 2018 reflects expectations of a more modest fiscal stimulus than previously assumed,” it said.
The reduction came in contrast to Europe where Moody’s expects the euro zone to achieve “above-potential growth” over the next two years and raised gross domestic product forecasts for Germany, France and Italy.
The report also arrives while market players look ahead to a revision of U.S. second quarter GDP out at 8:30AM ET (12:30GMT).
The data is expected to show that the economy grew at a 2.7% annual rate in the April-June quarter, upwardly revised from a preliminary estimate of 2.6% and improving sharply from growth of 1.4% in the first quarter.
5. Oil lower as markets evaluate Harvey impact, wait for inventory data
Oil prices traded lower on Wednesday as ongoing disruptions from Tropical Storm Harvey kept refineries from buying crude, weighing on demand but prompting fears over fuel shortages.
Market players also awaited the latest official weekly inventory data out at 10:30AM ET (14:30GMT) amid expectations for a draw of 1.9 million barrels.
Losses on Wednesday came despite the fact that inventory data from the American Petroleum Institute late in the prior session showed a larger-than-expected drop of 5.78 million barrels.
U.S. crude oil futures fell 0.51% to $46.19 at 6:03AM ET (10:03GMT), while Brent oil traded down 0.62% to $51.34.