Tuesday December 12th

12-12-2017

US futures post modest gains ahead of Fed meeting kickoff

U.S. stocks futures pointed to a slightly higher open on Tuesday, as the Federal Open Market Committee (FOMC) starts a two-day policy meeting. Dow Jones industrial average futures rose 53 points, while S&P 500 futures gained 2 points. In the previous session, U.S. equities closed in the black, bouncing back from earlier weakness seen when news emerged that a terror incident had happened near New York City's Times Square. A low tech device exploded at New York's Port Authority, which injured four people, including the suspect who was taken into custody. On the data front, the producer price index (PPI) rose 0.4 percent in November. Economists expected an increase of 0.3 percent. In earnings, MongoDB and VeriFone are expected to report after the bell. Meantime, the FOMC will begin the first day of its two-day monetary policy meeting. The central bankers are expected to deliver a decision on interest rates at the end of the two-day event on Wednesday, where investors expect the Federal Reserve to raise rates for one more time this year. In October, Fed minutes showed that a rate hike was all but certain during this holiday month, despite the low level of inflation. The Fed could also deliver its own thoughts on the state of the tax bill during the meeting. Elsewhere, a handful of European finance ministers called upon U.S. Treasury Secretary Steven Mnuchin for the U.S. to reconsider the current proposals surrounding the tax overhaul, according to a letter seen by Reuters. Ministers argued that elements of the reform could negatively impact international trade and the financial sector. Overseas, European stocks ticked higher, while markets in Asia finished mostly lower. The Nikkei 225 drifted lower by 0.32 percent, or 72.56 points, to close at 22,866.17 after hovering near the flat line earlier in the day. Across the Korean Strait, the Kospi edged down 0.42 percent to end at 2,461. Several heavyweight tech names rose, but those gains were offset by losses seen in retailers and energy-related stocks. Hong Kong's Hang Seng Index reversed early gains to slide 0.57 percent by 3:10 p.m. HK/SIN. Mainland markets also lost some ground. The Shanghai Composite fell 1.24 percent to close at 3,281.01 and the Shenzhen Composite lost 0.97 percent to end at 1,901.09. The blue-chip CSI 300 index finished down 1.32 percent. Oil rose above $65 a barrel for the first time since mid-2015 on Tuesday after a shutdown of the UK's biggest North Sea oil pipeline, which helps set the benchmark for global prices. The Forties pipeline, which was scheduled to pump 406,000 barrels per day (bpd) in December, was shut down on Monday after cracks were found in what traders believe is the first unplanned outage for some years. Brent crude, the global benchmark, was up by 92 cents at $65.61 at 1132 GMT, after breaking above $65 for the first time since June 2015 and trading as high as $65.70. U.S. crude rose 31 cents to $58.30. Gold was slightly higher on Tuesday, just up from its lowest in nearly five months in the previous session, and ahead of the start of a two-day U.S. Federal Reserve meeting. Spot gold rose 0.2 percent to $1,244.30 an ounce by 0350 GMT, after hitting its lowest since July 20 at $1240.10 on Monday. U.S. gold futures fell 0.1 percent to $1,246 an ounce.