By Peter Nurse
Investing.com -- U.S. stocks are seen opening lower Tuesday, with investors returning after a long weekend to fresh concerns about the health of the global economy.
Wall Street was closed on Monday for the July 4th holiday, but equity investors have had little to celebrate this year as aggressive monetary tightening to combat rampant inflation has stimulated worries about a global recession.
The major indices concluded one of the worst halves in decades on Thursday, and then posted their fourth week of losses in five despite modest gains during Friday’s trading session.
Ahead of Tuesday’s open, fresh survey data showed the Eurozone economy edging closer toward contraction, under the pressure of Russia's war in Ukraine, while the Bank of England warned that the global outlook had “deteriorated materially” and told banks to increase capital buffers to ensure they can weather the storm.
Helping the tone, U.S. Treasury Secretary Janet Yellen and Chinese Vice Premier Liu held a virtual meeting earlier Tuesday to discuss macroeconomic issues, a discussion which China's commerce ministry described as “constructive”.
This raised hopes that the fraught relationship between the two largest economies in the world may be thawing.
Investors are focusing on the release of the official monthly jobs report for June on Friday, with 270,000 jobs expected to have been created, a slowing in growth from the 390,000 in May. The unemployment rate is expected to stand still at 3.6%.
In the corporate sector, the airlines may be in the spotlight after U.S. airports recorded their busiest day since the pandemic began, with the number of flights ramping up after cancellations ran into the thousands on Friday and Saturday.
Oil prices weakened Tuesday, weighed by the concerns of a possible global economic slowdown, with Citigroup analysts warning that crude prices may fall to as low as $65 a barrel by the end of the year.
However, further supply cuts have limited the losses as Norwegian offshore workers started a strike that is expected to cut the oil output by as much as 130,000 barrels per day from Wednesday, the country's oil and gas association forecast on Sunday, about 6.5% of Norway's production.
Monday’s holiday means that the weekly crude inventory data from the industry body American Petroleum Institute , usually released on a Tuesday, will be delayed by a day.
By 07:00 AM ET, U.S. crude futures traded 0.3% lower at $108.09 a barrel, while the Brent contract was down 1.5% at $111.79. There was no settlement for WTI on Monday because of the Independence Day public holiday in the United States.
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