US pre-open: FOMC meeting in focus, Wilbur Ross downplays chances of major deal
By Iain Gilbert
Date: Monday 17 Jun 2019
(Sharecast News) - Wall Street futures were tracking slightly higher ahead of the open on Monday, with investors looking ahead to a key meeting of the Federal Reserve later in the week even as the upcoming G-20 leaders' summit in Japan loomed ever closer.
As of 1200 BST, Dow futures were pointing to a gain of 0.08% at the bell, while S&P 500 and Nasdaq Composite futures had the indices opening 0.08% and 0.16% firmer, respectively.
US stocks looked set to attempt a rebound at the open after closing lower on Friday as investors reacted to economic data out of China and tensions between the US and Iran following an attack on two oil tankers in the Gulf of Oman on Thursday.
The week's focus looked set to be squarely on a long list of central bank policy risks, with policymakers at the ECB conference in Sintra likely to provide a steady stream of comments for investors to weigh and questions as to whether or not the FOMC can be dovish enough to satisfy investors hungry for rate cuts.
Ahead of the open, James Hughes at AxiTrader said: "US index futures may be sitting below the Asian session highs, but expectations are still that Wall Street will start the week in positive territory.
"There's a lot of expectation over the messages that will be baked into the Federal Reserve's policy statement which is due on Wednesday. Although the chances of a rate cut this week remain limited, the recent rebound in stocks has been supported by the idea that dovish action will be seen by the Fed in the July meeting. Failure to telegraph this has the potential to initiate another bout of selling, whilst also being likely to escalate criticism of the Fed's monetary policy from the White House."
TD Securities also noted that although "all eyes will be on the Fed this week", its expectations were for the Fed to signal readiness to ease policy but "stop short of committing to a near term cut".
Elsewhere, Donald Trump warned Americans over the weekend that if he was not re-elected in 2020 there would be "a market crash the likes of which has not been seen before".
On a more hopeful note, in remarks to the Wall Street Journal on Sunday, US commerce secretary Wilbur Ross repoitedly downplayed the likelihood of a major trade deal should the leaders of the US and China meet at the 28-29 June G-20 leaders' summit.
"I think the most that will come out of the G-20 might be an agreement to actively resume talks. At the presidential level they're not going to talk about the details of how do you enforce a trade agreement," Ross reportedly said.
In terms of data, the Empire State manufacturing sector index will take up the majority of investors' attention on the first day of trading for the week.
The index is expected to give back most of its advance in May, declining to 10.5 in June.
Elsewhere, the National Association of Housebuilders' market index for June will be posted at 1500 BST.
There were no major corporate earnings slated for release on Monday.
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