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US pre-open: Stocks seen muted ahead of this week's Fed announcement; Boeing in focus

By Michele Maatouk

Date: Monday 18 Mar 2019

US pre-open: Stocks seen muted ahead of this week's Fed announcement; Boeing in focus

(Sharecast News) - US stock futures pointed to a muted open on Wall Street on Monday, with Boeing under pressure again as investors look to this week's Federal reserve policy announcement.
At 1220 GMT, Dow Jones Industrial Average futures were down 0.2%, S&P 500 futures were up 0.1% and Nasdaq futures were flat.

James Hughes, chief market analyst at Axi Trader, said: "There's still no further firm news on the trade deal with China, which again has the potential to drag on the health of US equities and the only stand out on today's economic calendar is the NAHB housing market index.

"This is forecast to show a modest uptick, although as the March reading it should also be supported by the fact that the previous print would have been caught in the shadow of the US government shut down. Even a small improvement here may be sufficient to convince the Fed that looser credit would be no bad thing."

The NAHB index is due out at 1400 GMT.

On the corporate front, Boeing shares were down 2% in pre-market trade following a Wall Street Journal report that federal prosecutors and officials from the Department of Transportation are investigating the development of the company's 737 MAX jetliners.

Elsewhere, deal news was set to be in focus as US financial services technology company FIS agreed to buy payments processor Worldpay in a $43bn deal. Under the terms of the transaction, Worldpay shareholders will be entitled to receive 0.9287 shares and $11 in cash for each of their shares. FIS shareholders will own around 53% of the combined company, while Worldpay shareholders will own the rest.

Dermira shares rocketed 61% in pre-market trade after the company said its new eczema treatment passed a key study in adult patients with moderate to severe atopic dermatitis.

Overstock was under the cosh as the online retailer released its fourth-quarter results.

Investors will be eyeing the latest policy announcement from the Federal Reserve on Wednesday.

Bart Hordijk, FX market analyst at Monex Europe, said: "It is our belief that March 20th will not be the day the Fed backtracks on its decision in January, as it can still hide behind the deceleration in the manufacturing sector. The dot plot will therefore follow the tone of the January meeting and signal either zero or one rate hike in 2019, instead of the two hikes still signalled in December. Perhaps more importantly even, we expect the Fed to announce when the current balance sheet run off will end, after the latest meeting minutes revealed "almost all participants thought that it would be desirable to announce before too long a plan to stop reducing the Federal Reserve's asset holdings later this year".

"Therefore we conclude that, as unexciting as it may be, this is not yet the meeting in which we expect the Fed to admit at least one rate hike will be needed in 2019 to keep inflation under control. Those who enjoy watching Fed governor Powell blush and confess the Fed shifted into a dovish gear too hastily, will most probably have to wait until the middle of the year before the central banker repents."

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