Thursday December 14th

14-12-2017

US futures rise after Fed raises rates; ECB holds rates steady

U.S. stocks futures are set for a positive open on Thursday, after sentiment was boosted by news that the Federal Reserve had hiked interest rates during its December policy meeting. Dow Jones industrial average futures rose 31 points, while S&P 500 and Nasdaq 100 futures gained 1.75 points and 6 points, respectively. In the previous session, the Dow Jones industrial average posted another record close after the U.S. central bank raised its benchmark interest rate by 25 basis points, as widely expected, while upping its economic growth outlook for the coming year. One of the more noteworthy actions that arose from the Federal Open Market Committee (FOMC) was that members had set a target for 2018's gross domestic product. Collectively, the group upgraded its GDP estimate to 2.5 percent, from 2.1 percent in September. Both the Bank of England (BOE) and European Central Bank (ECB) also delivered monetary policy decisions on Thursday, keeping interest rates steady. The British pound and the euro traded slightly higher. Elsewhere, a slew of economic data was released. Weekly jobless claims totaled 225,000, well below an estimate of 239,000. Meanwhile, retail sales rose 0.8 percent in November versus an estimated increase of 0.3 percent. The Flash US composite purchasing managers' index (PMI) is due out at 9:45 a.m. ET, followed by manufacturing and trade inventories at 10 a.m. ET. On the earnings front, Scholastic, Adobe Systems, Costco and Oracle are some of the names set to publish financial figures. Also in corporate news, Disney agreed to buy 21st Century Fox assets for more than $52 billion. The asets include Fox's movie studios, network Nat Geo, Asian pay-TV operator Star TV, stakes in Sky and Hulu and regional sports networks. Fox and Disney shares both declined 1 percent in the premarket. Politics will be at the back of investors' minds, as markets await any news surrounding tax reform. Negotiators from the House and Senate have reached an agreement concerning a tax plan, Orrin Hatch, the chairman of the Senate Finance Committee, announced Wednesday. Overseas, European markets slipped into the red, while markets in Asia finished on a mixed to lower note. The Nikkei 225 erased early gains to slide 0.28 percent Thursday local time, closing at 22,694.45. Across the Korean Strait, the Kospi closed down 0.45 percent on profit-taking after rising more than 1 percent earlier as the rest of Asia trended lower. The Hang Seng Index slipped 0.26 percent at 3:20 p.m. HK/SIN, with gains in property names offset by losses in consumer stocks. Mainland markets ended a touch softer after the People's Bank of China on Thursday raised both the reverse repo rate and medium-term lending facility rate by 5 bps. The Shanghai Composite lost 0.29 percent to end at 3,293.58. The Shenzhen Composite was little changed, closing off 0.04 percent. Oil prices fell on Thursday after the International Energy Agency (IEA) increased its forecast for U.S. oil output growth in 2018, raising the prospect of excess supply. U.S. West Texas Intermediate (WTI) crude futures fell 24 cents to $56.36 a barrel by 8:27 a.m. ET (1327 GMT). Brent crude futures, the international benchmark for oil prices, were at $62.27 a barrel, down 17 cents from their last close. The Paris-based IEA said U.S. crude output next year would climb by 870,000 barrels per day (bpd), up from its November forecast of 790,000 bpd. Gold inched up in early trade on Thursday as the dollar was nearly unchanged after tumbling in the previous session following the U.S. Federal Reserve's widely expected decision to raise interest rates, although it left the outlook on rates unchanged. Spot gold was up 0.15 percent at $1,257.11 an ounce as of 0123 GMT, after rising nearly 1 percent in the previous session. U.S. gold futures were up nearly 1 percent at $1,260.60.