New York and Shanghai stocks: sustained high oil prices could weigh on U.S. equities

U.S. market open

Brought forward by

1 hour due to daylight saving time

This week’s New York stock market (March 9–13) is expected to see direction set by moves in international oil prices tied to the Iran war. If West Texas Intermediate (WTI), which topped $90 a barrel on March 6 on concerns the Iran war could be prolonged, continues to climb, it is likely to place substantial downward pressure on U.S. equities.

Attention is also on U.S. inflation data due this week. First, the “February Consumer Price Index (CPI)” is scheduled for release on the 11th. Economists expect a 0.2% rise month on month. On the 13th, the “January Personal Consumption Expenditures (PCE) Price Index” will be released. Coming ahead of the Federal Reserve’s Federal Open Market Committee (FOMC) meeting on the 18th–19th, it could influence expectations for the policy rate. While these data do not reflect the impact of the Iran war, if the January and February inflation readings come in above expectations, concerns could grow over a renewed acceleration in prices and a pullback in consumption. Also on the 13th, the Labor Department’s Job Openings and Labor Turnover Survey (JOLTS), a gauge of labor-market conditions, will be released. Ellen Zentner, chief economic strategist at Morgan Stanley Wealth Management, said, “A weakening labor market is a factor for rate cuts, but if high oil prices persist, it carries the risk of triggering a surge in inflation.”

With the U.S. adopting daylight saving time from the 8th, regular trading hours for the New York stock market will shift from this week to 10:30 p.m. Korea time for the open and 5 a.m. the next day for the close—one hour earlier.

In the Shanghai stock market, China’s February CPI and Producer Price Index (PPI), due on the 9th, are cited as key indicators to watch. January CPI rose 0.2% year on year, but the pace of gains slowed, while PPI fell 1.4%.

Reporter Ahn Sang-mi saramin@hankyung.com