Monday April 25th


US traders mull Saudi Arabia, earnings and Fed

U.S. stock index futures traded lower Monday, ahead of major central bank meetings and the busiest week of first-quarter earnings season. Monday was comparatively quiet for quarterly reports, with KKR and Xerox posting results before the bell. Both companies will host conference calls at 10 a.m. ET. Halliburton, which was also scheduled to report, delayed the release of its earnings until May 3 to accommodate the April 30 deadline to close acquisition of Baker Hughes. The major data due on Monday are new home sales for March. European and Asian stock indexes traded lower on Monday as crude oil prices fell. Saudi Arabia, the de facto leader of OPEC, is expected to announce a plan later on Monday to diversify its economy away from oil production. The Federal Reserve will hold a policy meeting on Tuesday and Wednesday. It is unlikely to raise interest rates but may leave the door open for a rise at its next meeting in June. "In total, we expect the Fed to hike rates three times this year, to a range of 1.00 percent to 1.25 percent at year-end, as officials switch their focus from downside global risks to rising core inflation," economist Paul Ashworth said in a note from Capital Economics on Friday. The Bank of Japan is due to release its statement on monetary policy Thursday. The yen was near 111 yen against the greenback in early morning trade. The U.S. dollar index traded about a third of a percent lower, with the euro near $1.126. U.S. President Barack Obama is in Germany on Monday to meet German Chancellor Angela Merkel and other European leaders. Most Asian markets lost ground on Monday, with many traders likely taking to the sidelines ahead of several central bank decisions this week. The Japanese benchmark Nikkei 225 ended its positive run last week that added 4.3 percent to the index to close down 133.19 points, or 0.76 percent, at 17,439.30. Across the Korean Strait, the Kospi ended lower by 0.94 points, or 0.05 percent, at 2,014.55. In Hong Kong, the Hang Seng index was off 0.56 percent as of 3:15 p.m. HK/SIN. Chinese mainland markets also ended lower, with the Shanghai composite shedding 12.27 points, or 0.41 percent, to 2,946.96, and the Shenzhen composite was off by 7.65 points, or 0.41 percent, to 1,859.90. Markets in Australia and New Zealand are closed for ANZAC day public holiday on Monday. Major U.S. indexes ended mixed on Friday, with tech stocks leading declines after earnings in the sector disappointed. The Dow Jones industrial average closed up 0.1 percent, the S&P 500 was flat and the Nasdaq composite was down 0.8 percent. Shares of major tech companies, including Microsoft and Google's parent, Alphabet, fell last week by more than 5 percent after earnings missed forecasts. Oil prices reversed losses on Monday after slipping as traders took profits after three weeks of gains and as a jump in the dollar late last week was priced into fuel markets. Front-month Brent crude was trading at $45.40 per barrel at 9 a.m. ET (1300) GMT, up 29 cents from its last settlement. U.S. West Texas Intermediate (WTI) were down 16 cents at $43.89 a barrel. Gold steadied on Monday as a retreat in the dollar helped to arrest the previous session's 1.3 percent slide, but moves were muted ahead of a Federal Reserve policy meeting this week. The Fed is not expected to raise interest rates at this week's meeting, but markets will be looking for the U.S. central bank's take on the global economy and its monetary policy outlook. Gold is highly sensitive to rising rates, which lift the opportunity cost of holding non-yielding assets such as bullion, while boosting the dollar, in which it is priced. Spot gold was at $1,235.90 an ounce, up 0.3 percent from late on Friday, while U.S. gold futures for June delivery were up $7.20 an ounce at $1,234.70.