Wall Street set for lower open amid oil volatility; inflation data in focus

U.S. stock futures pointed to a negative open on Wednesday amid volatility in the oil market and as investors looked ahead to upcoming inflation data.

As of 4:40 a.m. ET, Dow Jones Industrial Average futures were 78 points lower, indicating a lower open of -23 points, while S&P 500 and Nasdaq futures were also in the red.

On Tuesday, stock markets stateside navigated through a wildly volatile session, with the Dow falling just a touch above 100 points by the close, despite a rise earlier in the session in excess of 100 points.

Reports of renewed trade talks between the U.S. and China failed to lift sentiment on Wednesday, with traders keeping a wary eye on volatility in the oil market.

Oil rebounded from losses earlier in the session following Tuesday’s 7 percent plunge. Prices had initially fallen on the back of investor angst over fears of an abundance of supply and not enough demand. President Donald Trump earlier this week sent another warning to producer cartel OPEC (Organization of Petroleum Exporting Countries), saying he hoped the group would not cut output in a move to buoy prices.

London Brent crude futures were 1.45 percent higher, trading at $66.42 a barrel, while U.S. West Texas Intermediate (WTI) climbed 0.9 percent to $56.20.

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Russia says no emergency action warranted to halt oil price decline

“It’s not right for market participants to react to any one-off fluctuations,” he said.

Novak also said the oil market still did not fully understand the fallout from U.S. sanctions against Iran, and how buyers would behave.

The United States announced the reinstatement of sanctions earlier this month against Iran over Tehran’s activities in the Middle East.

Eight importing countries have been given temporary exemptions by the United States to keep buying Iranian oil, prompting Iranian President Hassan Rouhani to say Washington would not be able to cut Iran’s oil exports to zero.

“I think the market is volatile due to a lot of uncertainty,” Novak said. He said Russia had been cutting oil production by around 20,000 barrels per day so far in November, from the record high of 11.41 million bpd in October.

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'Insane' for UK and EU to harm border trade, McLaren CEO says

The chief executive of British sports car maker McLaren Automotive has told CNBC that it would be “insane” for the United Kingdom and European Union (EU) to fail to agree a deal on Brexit.

Mike Flewitt said he spoke to U.K. Prime Minister Theresa May on a conference call two weeks ago and he is confident that a withdrawal deal will be done. How to maintain the frictionless movement of goods between Ireland and Northern Ireland after Brexit remains a sticking point in negotiations. However, the supercar executive warned that any outcome that slowed the cross-border movement of goods would be hugely damaging.

“It would be insane, both for the EU and for the U.K. to run into a situation where we’re affecting imports and exports through that period,” he said, before adding “We shouldn’t let ourselves run into a problem like that in this day and age, it would be crazy.”

Flewit stressed that he was not only talking about disruption to the automotive industry.

“Think of food stocks and livestock and anything that’s coming across borders being delayed (that) would be a real problem so I’m in the camp of optimists who think we’ll find a way through,” he told CNBC’s Julianna Tatelbaum at the firm’s headquarters just outside London.

McLaren officially opened a new composite factory in northern England on Wednesday, allowing it to directly design and build the carbon chassis of its cars in the United Kingdom. The McLaren Composites Technology Centre (MCTC) has been completed thanks to a £50 million ($64.6 million) joint investment with Sheffield City Council.

Flewitt said that decision, while not Brexit related, would help the car maker’s control over manufacturing as it moved more production “onshore.”

“It actually moves our U.K. content up from around about 50 percent to the core by value, closer to 60 percent,” he added.

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Dubai airport is on its way to receiving its 1 billionth passenger

“With 280,000 passengers a day and up to 13,000 bags flown through the hub, the concentration of not only the passenger traffic through DXB, but also the major contribution that it makes to the GDP of Dubai, is obviously incredibly significant,” he said.

Dubai Airports owns and manages the operation and development of both of airports in the emirate — Dubai International (DXB) and Dubai World Central (DWC).

But as Dubai International Airport continues to grow, it faces an increasing infrastructure challenge, leading to capacity constraints.

“We are in the midst of a new master plan at the moment for 2030, which will see us boost the capacity of this airport by a further 30 million to 120 million by 2022,” Griffths said.

“The newer airport, Dubai World Central Al Maktoum International, already has the capacity for a further 26 million passengers. So across the two airports, 146 million total airport capacity is a pretty impressive number and it will still give us the headroom for significant further growth here in Dubai,” the CEO said.

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Italy sticks to its budget targets, defying the EU

Italys Labor and Industry Minister and deputy PM Luigi Di Maio (L) and Italys Interior Minister and deputy PM Matteo Salvini smile before the swearing in ceremony of the new government at Quirinale Palace in Rome on June 1, 2018. 


Italys Labor and Industry Minister and deputy PM Luigi Di Maio (L) and Italys Interior Minister and deputy PM Matteo Salvini smile before the swearing in ceremony of the new government at Quirinale Palace in Rome on June 1, 2018. 

The Italian government said Wednesday it would stick with its high-spending budget plan, in a rejection of calls by the European Union to revised its fiscal targets.

Rome clung onto its contested budget deficit figure of 2.4 percent of gross domestic product (GDP), a move which is likely to send tremors into domestic and European capital markets Wednesday.

The 2.4 percent proposed deficit dwarfs the previous Italian administration’s deficit goal of 0.8 percent of GDP.

Italy also kept its growth assumptions for 2019, 2020 and 2021 unchanged, despite both the EU and the International Monetary Fund (IMF) claiming those assumptions are too high.

Matteo Salvini, Italy’s deputy prime minister, said overnight that the government would stick to its budget targets for 2019, but would up asset sales and keep spending in check.

Tuesday was the official deadline for the Italian government to submit a revised draft budget to the EU’s executive body, the European Commission.

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'A.I. is not gonna replace people,' says Salesforce executive

Artificial intelligence is “a big help, not a hindrance,” according to a Salesforce executive.

“AI is not gonna replace people,” Peter Schwartz, senior vice president of strategic planning at Salesforce, told CNBC on Tuesday at the Singapore FinTech Festival.

On the flip side, Schwartz added: “It’s going to make people far more capable.”

Instead of thinking about the “most mundane things,” Schwartz said AI would allow people to “focus” on issues such as creativity and interpersonal skills.

Schwartz’s comments on the impact of AI were in line with a report from the World Economic Forum in September, which said developments in automation technologies and artificial intelligence could result in 58 million net new jobs being created by 2022.

“We have smartphones today, but it began with the Blackberry and the Palm Pilot which was pretty crude, but you got a hint of what was to come,” he said, using the development of the smartphone industry as a parallel example for where he sees the future of artificial intelligence.

In a similar manner, personal digital assistants such as Amazon’s Alexa and Apple’s Siri are “the beginnings of a next wave,” he added.

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Market volatility due to 'anxiety' ahead of our December meeting, OPEC's Barkindo says

Mohammed Barkindo, secretary general of the Organization of Petroleum Exporting Countries (OPEC), speaks during a news conference following the 174th Organization Of Petroleum Exporting Countries (OPEC) meeting in Vienna, Austria, on Friday, June 22, 2018.

Stefan Wermuth | Bloomberg | Getty Images

Mohammed Barkindo, secretary general of the Organization of Petroleum Exporting Countries (OPEC), speaks during a news conference following the 174th Organization Of Petroleum Exporting Countries (OPEC) meeting in Vienna, Austria, on Friday, June 22, 2018.

OPEC’s secretary general has told CNBC that oil price volatility is due to anxiety ahead of the 14-member oil producer group’s next meeting in Vienna in December.

“What is happening at the moment, in our opinion, is the normal volatility that comes in the run up to our conferences. As you know, we reconvene in Vienna on the 6th and 7th of December … and this period between now and December is a period of anxiety for all stakeholders,” Barkindo told CNBC Europe’s Squawk Box at the ADIPEC conference in Abu Dhabi.

He said the organization of oil producers, whose defacto leader is Saudi Arabia, remained focused on stabilizing oil markets, which have seen supply and demand out of kilter for several years.

“We remain very focused on our principle objectives which we have made clear in the most transparent manner you can think of,” he said.

“We remain focused jointly with our markets to restore stability to this market and we have registered some modest, I may say, achievements in that regard.”

Oil prices slumped to their lowest level in more than 8 months on Wednesday, extending losses from a 7 percent plunge in the previous session.

The latest falls come amid heightened fears of a slowdown in global demand, with OPEC downwardly revising its projections for 2019.

The influential oil cartel now expects demand to grow by around 1.29 million barrels per day (bpd) next year, approximately 70,000 bpd lower than last month’s forecast.

The Middle East dominated group has made increasingly frequent public statements in recent weeks, saying it is prepared to do “whatever it takes” to tighten supply and prop up prices.

That puts OPEC on another collision course with President Donald Trump, who publicly supports lower fuel prices and has urged OPEC not to cut production.

International benchmark Brent crude traded at around $65.43 Wednesday morning, down 0.1 percent, while U.S. West Texas Intermediate (WTI) stood at $55.45, down more than 0,4 percent.

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European stocks set to open lower as oil slumps; UK, EU agree draft Brexit deal

Traders will be keeping a close eye on moves in oil prices on Wednesday after crude plunged as much as 7 percent in the previous session on the back of fears around oversupply and weakening global demand.

As of 1 a.m. ET, Brent crude was seen trading half a percent lower to $65.15 a barrel while U.S. West Texas Intermediate crude fell 0.74 percent to $55.28. The rout will likely put pressure on oil firms’ share price during the trading session Wednesday.

Politics will also be a focal point for investors on Wednesday after news of a key breakthrough between Britain and the European Union on a divorce deal. Negotiators on neither side have reportedly agreed to a draft deal late Tuesday; British Prime Minister Theresa May will meet with her cabinet on Wednesday to get her ministers on side.

In corporate news, the European Commission sent a statement of objections to Siemens and Alstom over their proposed rail merger on Tuesday. The two firms confirmed the news to CNBC and said they would respond to the objections from EU’s executive body. Alstom is set to report its first-half results on Wednesday.

Other corporates slated to post earnings include Maersk, E.On and Wirecard.

Meanwhile, in data, key German gross domestic product (GDP) growth figures will be released Wednesday, amid fears of a slowdown in the country’s economy.

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'We need to trust the decision-making' of OPEC: Russian sovereign wealth fund

Russia, one of the largest oil producers in the world, has been hit by volatile oil prices and tightening sanctions from the U.S. and Europe.

That, together with weakened investor sentiment in emerging markets, has set the Russian currency on a depreciation path this year: One U.S. dollar bought around 67.9043 rubles on Wednesday, compared to 57.6575 rubles at the start of 2018.

As U.S. lawmakers look to push for tougher sanctions on Russia, Dmitriev said he believes those actions would not affect sovereign wealth funds. His fund has $10 billion of reserved capital under management.

“Frankly, we believe additional sanctions on RDIF will be highly unlikely because that would be the first case in the world where a sovereign wealth fund would be sanctioned,” he said, explaining that such a move would create a precedent for other sovereign wealth funds to withdraw from the U.S.

“We believe that businesses are against sanctions and sanctions should not be used as an instrument in political discussion,” added Dmitriev.

— CNBC’s Tom DiChristopher contributed to this report.

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