Wednesday September 26th

26-09-2018

US stock futures edge higher ahead of Fed rate decision; political turmoil festers

U.S. stock-index futures rose on Wednesday as investors looked ahead to the Federal Reserve's latest decision on U.S. monetary policy. Dow Jones Industrial Average futures climbed 25 points, indicating a gain of 27.79 points at the open. S&P 500 and Nasdaq 100 futures also rose. The Fed concludes its two-day monetary-policy meeting later in the day and is scheduled to release its decision at 2 p.m. ET. The central bank is largely expected to raise rates by 25 basis points, marking the eighth time it has tightened policy since 2015. Investors will also look for clues about future moves on monetary policy, especially those before year-end. Market expectations for a December rate hike were above 80 percent on Wednesday, according to the CME Group's FedWatch tool. The Fed has already hiked rates twice this year. "I have little doubt that the Committee will lift overnight rates by 25 basis points this afternoon," said Jeremy Klein, chief market strategist at FBN Securities. "Furthermore, Jerome Powell and his colleagues will likely signal unambiguously that they intend to do so again in three months." "The rewriting of the corporate and individual tax code along with inflation roughly matching the central bank's publicly stated target deserves another hike," said Klein. The benchmark 10-year Treasury note yield slipped to 3.087 percent while the two-year note yield hovered around 2.84 percent. Wednesday's Fed decision comes after stocks closed lower in the previous session as renewed worries around trade dampened investor sentiment. During a speech to the United Nations General Assembly on Tuesday, President Donald Trump defended his administration's stance on trade, telling international leaders the U.S. would no longer endure "such abuse," but act in its "national interest" when it feels like it's being duped. Trump went on to criticize OPEC and OPEC nations, stating that the group was "ripping off" the rest of the world and taking advantage by delivering high oil prices. The president's comments came after Trade Representative Robert Lighthizer said Tuesday that the United States was prepared to move forward with Mexico on a new NAFTA-style accord — with or without Canada's participation. The Nikkei 225 recovered from its losses in the morning to end higher by 0.39 percent at 24,033.79. The Topix index, on the other hand, rose from its earlier low to close largely flat at 1,821.67. In Greater China markets, Hong Kong's Hang Seng index traded higher by 1.24 percent as of 3:15 p.m. Over on the mainland, the Shanghai composite closed higher by 0.92 percent at around 2,806.82 while the Shenzhen composite advanced by 0.733 percent at about 1,447.85. South Korean markets were closed for a public holiday. Brent crude was trading around its highest in nearly four years on Wednesday, while U.S. crude futures fell as Washington tried to assure consumers that the market would be well supplied before sanctions are re-imposed on producer Iran. Brent crude futures were up 10 cents, or 0.1 percent, at $81.87 a barrel by 0645 GMT, after gaining nearly 1 percent the previous session. Brent rose on Tuesday to its highest since November 2014 at $82.55 per barrel. U.S. crude futures were down 4 cents at $72.24 a barrel. They climbed 0.3 percent on Tuesday to close at their highest level since July 11. Gold prices drifted in a narrow range on Wednesday as investors awaited cues of the U.S. Federal Reserve's two-day meeting, where policymakers are expected to raise interest rates for the third time this year. Spot gold was up 0.1 percent at $1,201.64, as of 0337 GMT, having moved in a $3 range early Wednesday. U.S. gold futures climbed 0.1 percent to $1,206.0 an ounce.