Wednesday August 1st

1-08-2018

US stock futures waver ahead of Fed decision

U.S. stock index futures pointed to a flat open on Wednesday as the Federal Reserve's policy meeting draws to a close. Around 8:25 a.m. ET, Dow Jones Industrial Average futures were down 29 points, indicating a decline of 23.19 points, while S&P 500 futures pointed to a relatively flat start to its session. Nasdaq 100 futures rose, however, following upbeat earnings out of the tech sector. Investors will pay close attention when the Federal Reserve delivers its latest policy decisions at 2 p.m. ET, concluding a two-day Federal Open Market Committee (FOMC) conference. While market-watchers are not expecting a rise in interest rates, discussion on trade or where the Federal Reserve is thinking of heading could be on the table. The meeting follows recent releases of economic data and the news that President Donald Trump was "not thrilled" about rising interest rates, expressing concern that the Fed could upset the economic recovery. Earnings season continued Wednesday, with Restaurant Brands, AMC Entertainment and Generac among the companies that reported before the bell. Tesla is set to release after the close Wednesday. Apple also reported earnings after the bell on Tuesday, surpassing analyst expectations. The report sent the tech giant's stock up by more than 4 percent in the premarket. In economic data, ADP employment figures showed job gains of 219,000 for July. Economists polled by Reuters had forecast a gain of 185,000. Concerns surrounding trade continue. According to a Reuters report, citing a source, the Trump administration is looking at the possibility of slapping a 25 percent tariff on $200 billion worth of imported Chinese goods — after initially setting them at 10 percent. This comes as tensions between Washington and Beijing ramp up, and show no signs of easing. Asian stocks closed mixed on Wednesday as investors digested headlines related to a months-long trade dispute between the U.S. and China. The Nikkei 225 advanced 0.86 percent, or 192.98 points, to close at 22,746.70, buoyed by extended softness in the yen. Over in South Korea, the Kospi gained 0.51 percent to end at 2,307.07. Chinese shares moved into negative territory as sentiment took a hit from trade headlines while investors digested the release of a private survey of Chinese manufacturing activity, which met expectations. The Shanghai Composite fell 1.81 percent to close at 2,824.21, with shares selling off in the afternoon, and blue-chip CSI 300 index finished the day down 2.01 percent. Meanwhile, Hong Kong's Hang Seng Index pared early gains to slip 0.54 percent by 3:03 p.m. Oil prices fell for a second straight session on Wednesday, pressured by an industry report that U.S. stockpiles of crude rose unexpectedly and by higher OPEC production, adding to indications of more ample supply. On Tuesday, the American Petroleum Institute said crude inventories rose by 5.6 million barrels last week. Analysts had expected a decrease of 2.8 million. The U.S. government's supply report is due on Wednesday. Brent crude, the global benchmark, dropped $1.39, or 1.9 percent, to $72.82 a barrel by 8:33 a.m. ET (1233 GMT), adding to a 1.8 percent loss in the previous session. U.S. crude was down $1.04, or 1.5 percent, at $67.72, after dropping 2 percent on Tuesday. Gold prices dropped on Wednesday, pressured by a stronger U.S. dollar ahead of the outcome of a Federal Reserve monetary policy meeting later in the day. Spot gold was down 0.12 percent at $1,221.98. The bullion gained slightly in the previous session on a weaker dollar versus the yuan after a report that the United States and China were trying to restart negotiations to defuse a potential trade war. U.S. gold futures for August delivery were 0.23 percent lower at $1,230.80.