Wednesday March 21st

21-03-2018

US stock futures pause for breath as Fed decision takes center stage

U.S. stock index futures slipped ahead of Wednesday's open, as investors waited for an all-important meeting by the U.S. Federal Reserve. Around 8:10 a.m. ET, Dow Jones industrial average futures traded 36 points lower, indicating a loss of 11.27 points at the open. S&P 500 and Nasdaq 100 futures also pointed to slight losses at the open. In the previous trading session, Wall Street finished higher, with the Dow Jones industrial average rising more than 100 points by the close. Wednesday will see the conclusion of a two-day meeting by the Fed, where the Federal Open Market Committee (FOMC) will release its latest interest rate decision and give comments on the economy at 2 p.m. ET. The meeting will be followed by a news conference, which will be headed up for the first time by the newly-appointed Fed Chair Jerome Powell. The event is expected to see the central bank raises interest rates for the first time in 2018, with investors expecting an increase of 25 basis points. Market watchers will also be paying close attention to see if the central bank comments on key topics such as inflation, the state of the U.S. economy, and politics. While trade is a big subject shaking up markets as of late, the Fed may not choose to touch upon the topic of potential trade wars, in order to keep markets at bay. Looking to the corporate space, investors will be paying close attention to social media stocks after reports emerged alleging that Cambridge Analytica, an analytics company, had gathered data from 50 million Facebook profiles without the permission of its users. In data, mortgage applications fell 1.1 percent last week despite a drop in rates. Other data set for release Wednesday include existing home sales at 10 a.m. ET. Overseas, stocks in the European and Asian region fell into the red on Wednesday. Seoul's Kospi closed little changed after hovering slightly above the flat line earlier in the day. The benchmark shed 0.02 percent to close at 2,484.97 and the junior Kosdaq gave up early gains to slip 0.54 percent. Hong Kong's Hang Seng Index was flat at 3:12 p.m. HK/SIN, paring its more than 1 percent gain seen earlier in the day. Mainland markets reversed early gains to close lower. The Shanghai composite eased 0.27 percent to end at 3,281.59 and the smaller Shenzhen composite slid 0.73 percent to close at 1,858.61. Markets in Japan were closed on Wednesday for the vernal equinox. Oil rose for a second day on Wednesday, after preliminary data showed a surprise decline in U.S. crude inventories and as concern persisted over possible disruption to Middle East supply. Unexpectedly large inventory declines in the United States helped underpin the market, even though refinery maintenance reached a peak this month. But with the hardening stance of the United States towards Iran, most investors were reluctant to sell oil aggressively. Brent crude futures were up 69 cents on the day at $68.11 a barrel by 8:22 a.m. ET (1222 GMT). The price has risen by about 10 percent since hitting a two-month low of $61.77 in early February. U.S. West Texas Intermediate (WTI) crude futures were up 53 cents at $64.07 a barrel. Gold recovered from a three-week low as the dollar eased on profit-taking ahead of the U.S. Federal Reserve's meeting later on Wednesday, which could provide further clues on the pace of expected interest rate increases. With a rate rise of 25 basis points seen as a done deal, investors will be on the lookout for whether the Fed forecasts four increases in 2018, one more than previously forecast. Spot gold was up 0.37 percent at $1,315.65 an ounce at 8:21 a.m. EST, having dropped as low as $1,306.91 in the previous session. U.S. gold futures for April delivery rose 0.27 percent to $1,315.70.