Portfolio

US pre-open: Stocks set to open lower ahead of Fed meeting

By Iain Gilbert

Date: Tuesday 17 Sep 2019

US pre-open: Stocks set to open lower ahead of Fed meeting

(Sharecast News) - US futures had stocks opening lower for a second straight session as market participants looked set to somewhat shift their focus from Middle Eastern woes and over to the latest meeting of the Federal Reserve.
As of 1230 BST, Dow futures were down 0.19%, while S&P 500 and Nasdaq futures had the indices opening 0.13% and 0.18% lower, respectively.

Wall Street stocks closed weaker on Monday, with the Dow Jones snapping an eight-day winning streak, after an attack on a Saudi Arabian oilfield and the country's key processing facility sparked fears that a surge in crude prices could add to the slowdown in the global economy.

However, with oil prices moving lower on Tuesday, attention was turning towards the Federal Reserve's two-day policy meeting, which started on Tuesday.

Market participants and analysts alike have been divided on what the central bank will do at its meeting, with the recent increase in energy prices leading some investors to think the Fed may not quite be in such a rush to lower interest rates yet again.

On a related note, Credit Suisse's strategy team led by Andrew Garthwaite pointed out that the impact of a higher oil price on the US economy was close to zero given that America was no longer a net importer; in fact, the ISM Purchasing Managers' Index and Treasury yields tended to move in the same direction as oil prices.

"Indeed, equities and bond yields tend to follow ISM and higher spot oil helps higher ISM (with oil extraction c13% of US manufacturing). US inflation expectations tend to follow oil and look low (with core inflation at 2.4% yet 10 year breakeven inflation at 1.7%)," Gathwaite said.

SpreadEx analyst Connor Campbell said: "Not only have the markets got to worry about the situation between Saudi Arabia and Iran, but the prospect of tomorrow night's Fed meeting.

"What was once a certain rate cut has seen some doubt creep in, thanks to improving relations between the Washington and Beijing and a one-year high US core inflation reading."

On the data front, industrial production numbers for August will be released at 1415 BST, while the NAHB's housing market index will be posted at 1500 BST.

In corporate news, Adobe and FedEx will both report earnings throughout the course of the day.

..

Email this article to a friend

or share it with one of these popular networks:


Top of Page