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US pre-open: Futures point to small gains ahead of big tech testimony and Fed decision

By Iain Gilbert

Date: Wednesday 29 Jul 2020

US pre-open: Futures point to small gains ahead of big tech testimony and Fed decision

(Sharecast News) - Wall Street futures were pointing to a mostly positive open ahead of the bell on Wednesday as market participants awaited testimony from the chief executives of some of big tech's most powerful names and the Federal Reserve's interest rate decision later in the day.
As of 1245 BST, Dow Jones futures were up 0.04%, while S&P 500 and Nasdaq-100 futures had the indices opening 0.16% and 0.41% firmer, respectively.

The Dow closed 205.49 points lower on Tuesday amid stimulus headlines and another slab of corporate earnings.

Amazon, Apple, Facebook and Alphabet were all in focus, with the companies' CEOs set to testify before the House Antitrust Subcommittee later in the day following a year-long probe into alleged anti-competitive practices.

Later on in the day, the Federal Reserve's interest rate decision will be revealed at 1900 BST, followed shortly thereafter by a Fed press conference at 1930 BST.

The Fed is expected to keep short-term interest rates unchanged at near zero as part of an effort to support the still struggling US economy. On Tuesday, the Fed revealed that it would extend emergency lending programs for the rest of 2020.

CMC Markets' David Madden said: "There has been a lot of chatter the Fed will reiterate the point that rates will stay ultra-low for years to come. The central bank has already been extremely aggressive with regards [to] its stimulus packages, and there is a view they will do what it takes to cushion the blow of the health crisis.

"It is likely that volatility will remain low throughout the session as dealers await the update."

The tête-à-tête between Republican and Democratic lawmakers over a proposed $1trn stimulus package will also be in focus again on Wednesday.

In the corporate space, Starbucks posted a third-quarter loss overnight but raised its fourth-quarter forecast, while AMD surged in extended trading after posting a better-than-expected quarterly performance and issuing upbeat full-year guidance.

General Motors swung to a quarterly loss as the coronavirus shuttered factories and devastated sales, while General Electric posted slightly better-than-expected second-quarter numbers.

Boeing posted a net loss of $2.4bn and said it would slow aircraft production amid Covid-19-weakened demand, while PayPal and Qualcomm will post earnings after the close.

In macro news, after three weeks of increases, mortgage applications fell 0.8% last week, according to the Mortgage Bankers Association. Despite mortgage rates continuing to sit near record lows, the MBA's unadjusted purchase index also fell 1% last week - but was up 21% compared to last year, marking ten straight weeks of year-on-year increases for purchase activity.

Still to come on the data front, goods trade balance figures for June will be posted at 1330 BST, while last month's pending home sales figures will follow at 1500 BST.

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