Wednesday April 27th


Apple shares weigh on futures ahead of Fed

U.S. stock index futures traded lower on Wednesday, amid of swathes of big-name earnings and a Federal Reserve policy decision. Nasdaq 100 futures were off about 1 percent. Shares in Apple were down more than 8 percent in pre-market trade after the company reported quarterly earnings and revenue that missed analysts' expectations. Its guidance for the current quarter also missed forecasts. Companies that reported quarterly results early in the day included Comcast, Boeing and United Technologies Corporation. Comcast is said to be in talks to acquire Dreamworks Animation in a $3 billion deal. Facebook will post numbers after Wall Street closes. Pending home sales data will be out on Wednesday, along with crude inventories. WTI and Brent crude oil futures extended gains in Asia overnight, following a reported drop in U.S. inventories. Oil hit its highest level this year on Wednesday, driven by a falling dollar and evidence of declining U.S. supply, putting the price on course for its strongest monthly performance since last April. Brent crude futures were up 85 cents at $46.59 a barrel by 8:58 a.m. ET (1258 GMT), having earlier hit a 2016 high of $47.05. The international benchmark has risen nearly 20 percent in April, its largest one-month gain in a year. U.S. West Texas Intermediate crude futures rose 85 cents to $44.89 a barrel, just off a session peak of $45.18. Brent received extra support from news that Saudi Arabia and Kuwait appear no closer to restarting their jointly operated Khafji oilfield, which produced 280,000 to 300,000 barrels per day before environmental problems forced a closure in October 2014. WTI was further bolstered after the American Petroleum Institute reported a draw of nearly 1.1 million barrels in U.S. crude inventories last week. Analysts had expected a 2.4-million-barrel build. Total mortgage application volume decreased 4.1 percent last week on a seasonally adjusted basis from the previous week, according to the Mortgage Bankers Association. The U.S. advance March goods trade deficit came in at $56.90 billion, narrowing from the $62.86 gap reported in the prior month. The Federal Open Market Committee (FOMC) rate decision for April is due at 2 p.m. ET. No interest rate hike is expected, although the possibility of one in June may be flagged. "The o/n (overnight) Fed funds rate will be held steady and the focus shall be on the continued strength in the labor markets, while there shall be continued discussions regarding the weakness in the economies abroad and thus the need to hold policy steady," market commentator, Dennis Gartman, said in The Gartman Letter on Tuesday. Asia markets closed lower on Wednesday, ahead of key central bank decisions from the U.S. Federal Reserve, the Bank of Japan (BOJ) and the Reserve Bank of New Zealand this week. In Japan, the Nikkei 225 finished down 62.79 points, or 0.36 percent, at 17,290.49, while across the Korean Strait, the Kospi fell 4.23 points, or 0.21 percent, at 2,015.40. In Hong Kong, the Hang Seng index was off 0.26 percent as of 3:12 p.m. HK/SIN, while Taiwan's Taiex closed down 18.52 points, or 0.22 percent, at 8,563.05. In China, the Shanghai composite ended down 10.69 points, or 0.36 percent, at 2,954.00, and the Shenzhen composite lost 5.47 points, or 0.29 percent, to 1,876.51. Analysts said markets are still mostly on hold as investors await the outcome from the latest Fed and BOJ meetings. Gold rose for a third straight session on Wednesday as weaker-than-expected U.S. data weighed on the dollar ahead of the Federal Reserve's policy decision later in the day. The Fed is likely to keep rates steady, and the focus rests squarely on the tone of its statement and any timing for an eventual rate hike. The U.S. central bank raised rates in December for the first time in nearly a decade. Spot gold was up 0.6 percent at $1,249.81 an ounce.