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Oil Prices Make A Rebound

Terror bombings in New York City and New Jersey over the weekend do not appear to be having a negative affect on stock market futures to kick off the week. There is a sought-after suspect this morning in connection with the crimes, which caused 29 casualties but no fatalities. For sure it could have been worse.

Market futures are up partly due to a rebound in oil prices. A signal from oil-rich Venezuela that an OPEC deal will be forthcoming to stabilize global oil prices has been received well by early traders. The WTI is up 1.4% at this hour and the Brent is up 1.3%. Prices are still lagging down in the mid-$40s right now, but the spectre toward $50-per-barrel oil looks to have re-emerged.

Of course, the big news this week is the meeting of Fed presidents and a decision on whether to raise interest rates a quarter of 1%. No raises have occurred thus far in 2016, and this is the final time the Fed will meet until November, just a few days before the U.S. General Election.

We’ve heard from several Fed presidents over the past few weeks, and the tide toward hawkishness does appear to be turning. But raising rates in the current environment — with monetary easing and bond yields elsewhere on the globe lagging in negative territory, to say nothing of domestic inflation pressures which are minor — might appear to be shutting down the party early.

December looks like the better bet for a raise at this stage. A year ago December was the last time a 25 basis-point rate hike occurred, but since then we’ve seen the Fed tread with caution as unknown developments beyond our borders — Brexit being a prime example — have clouded the global growth outlook.

This week we’ll also see some key quarterly earnings results from companies like FedEx FDX, Nike NKE and Adobe Systems ADBE. It’s a curious time in the earnings calendar, four weeks before Q3 earnings season begins in earnest, where we get our first glimpse of global logistics performance (FedEx), business and personal software sales (Adobe) and the pinnacle of specialty retail (Nike). For more on this week in earnings, check out Zacks Director of Research Sheraz Mian’s latest Earnings Trends report: Q3 Earnings Season Gets Underway.

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