Wall Street was poised to open with gains on Wednesday despite a gloomy global economic forecast and oil prices rose ahead of an OPEC meeting later this week.
Futures for the Dow Jones Industrial Average gained 0.4% before the bell while futures for the S&P 500 rose 0.5%.
A report forecasting that the global economy will slow next year didn't seem to bother markets, which have flourished in November despite ongoing inflation, elevated interest rates and geopolitical calamities.
Paris-based Organization for Economic Cooperation and Development estimated Wednesday that international growth would slow to 2.7% in 2024 from an expected 2.9% pace this year. That would amount to the slowest calendar-year growth since the pandemic year of 2020.
The report said that a key factor in the global slowdown is the expected deceleration of the world’s two biggest economies, the United States and China.
Despite the tepid forecast, the organization is “projecting that recessions will be avoided almost everywhere,” OECD Secretary-General Mathias Cormann said. He added there are risks that inflation will stay persistently high and that the Israel-Hamas conflict and Russia’s war in Ukraine could affect prices for commodities, such as oil or grain.
On Thursday the government releases its October data on the Fed’s preferred measure of inflation. Economists expect that measure to continue easing, as it has been since the middle of 2022. The loosening grip from inflation and a resilient economy have raised hopes that the Fed might finally be finished with raising its benchmark interest rate.
The Federal Reserve will meet again in December to update its interest rate policy. The central bank had been raising rates to push inflation back down to 2% and has been closing in on that goal. The central bank has been working to lower rates while trying to avoid a recession in what is referred to as a “soft landing” for the economy. The latest economic data adds to hopes for that outcome.
In corporate news, General Motors jumped 9.2% in premarket trading after the Detroit automaker said it is raising its dividend, despite its pretax earnings taking a $1.1 billion hit this year due to production lost during a six-week strike by autoworkers.
Discount retailer Dollar Tree fell 1% before the bell after it missed Wall Street's third-quarter sales and profit targets.
European shares were mostly higher on Wednesday after a mixed session in Asia, where selling of property and technology shares pulled Chinese benchmarks lower.
France's CAC 40 rose 0.5% in early trading, while Germany's DAX added 1.1%. Britain's FTSE 100 was unchanged.
In Asian trading, Japan's benchmark Nikkei 225 declined 0.3% to finish at 33,321.22. Australia's S&P/ASX 200 gained 0.3% to 7,035.30. South Korea's Kospi shed nearly 0.1% to 2,519.81. Hong Kong's Hang Seng dropped 2.1% to 16,993.44, while the Shanghai Composite fell 0.6% to 3,021.69.
Food delivery company Meituan's Hong Kong-traded shares dropped 12.2% after it forecast its revenue will fall in the current quarter.
Troubled property developer China Evergrande sank 10.4% following reports that its property services group was suing the parent company to recover deposit guarantees. Sino-Ocean Group Holding fell 6.9%.
Oil prices rose ahead of a meeting of OPEC members set for Thursday.
“OPEC+ is struggling to reach an agreement to extend production cuts, leaving the oil market in flux, Matthew Weller of Forex.com said in a report. ”While not the most likely scenario, a collapse in talks could take oil prices to multi-month lows."
Benchmark U.S. crude rose $1.30 to $77.71 a barrel in electronic trading on the New York Mercantile Exchange. It gained $1.55 to $76.41 a barrel on Tuesday.
Brent crude added $1.12 to $82.59 a barrel.
In the bond market, the yield on the 10-year Treasury fell to 4.27% early Wednesday, down from 4.33% late Tuesday. That's pressuring the dollar, which fell to 147.45 Japanese yen. It had been trading near 150 yen for weeks. The euro fell to $1.0986 from $1.0992.
On Tuesday, the S&P 500 edged up 0.1%. It is on track to close out November with its strongest monthly gain of the year. The Dow Jones Industrial Average rose 0.2% and the Nasdaq composite eked out a 0.3% gain.
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