Futures Pointing To Mixed Open On Wall Street – U.S. Commentary
Stocks may show a lack of direction in early trading on Wednesday ahead of the Federal Reserve’s monetary policy announcement. The major index futures are currently pointing to a mixed open, as the Dow futures are down by 16 points but the Nasdaq futures are up by 17.5 points.
Traders may be reluctant to make any significant moves ahead of the Fed’s announcement of its latest monetary policy decision, which is due at 2 pm ET.
The Fed is widely expected to leave interest rates unchanged, but the accompany statement could provide clues about the outlook for rates.
At its June meeting, the Fed raised interest rates by 25 basis points to a range of 1.75 percent to 2 percent and forecast two additional rate hikes this year.
Traders are also digesting the latest news regarding the escalating trade dispute between the U.S. and China, the world’s two largest economies.
Reports said President Donald Trump’s administration is considering raising the proposed tariff on $200 billion worth of Chinese imports to 25 percent from the 10 percent announced last month.
A spokesman for China’s Foreign Ministry responded by accusing the U.S. of “blackmail” and warning of inevitable countermeasures if the U.S. takes further escalatory steps.
The latest news comes on the heels of yesterday’s report from Bloomberg indicating the U.S. and China are trying to restart trade talks.
Meanwhile, a notable advance by Apple (AAPL) may support the tech-heavy Nasdaq, with the tech giant jumping by 4.1 percent in pre-market trading.
The advance by Apple comes after the company reported better than expected fiscal third quarter results and provided upbeat guidance.
On the U.S. economic front, payroll processor ADP released a report showing private sector employment in the U.S. increased by much more than expected in the month of July.
ADP said private sector employment jumped by 219,000 jobs in July after climbing by an upwardly revised 181,000 jobs in June.
Economists had expected an increase of about 185,000 jobs compared to the addition of 177,000 jobs originally reported for the previous month.
Shortly after the start of trading, the Institute for Supply Management is scheduled to release its report on activity in the manufacturing sector in the month of July.
The ISM’s purchasing managers index is expected to edge down to 59.5 in July from 60.2 in June, although a reading above 50 would still indicate growth in the manufacturing sector.
The Commerce Department is also due to release its report on construction spending in the month of June. Construction spending is expected to rise by 0.3 percent in June after climbing by 0.4 percent in May.
Stocks showed a strong move to the upside in morning trading on Tuesday and managed to hold on to most of their gains throughout the afternoon. The upward move on the day came on the heels of the notable weakness seen in the previous session.
The major averages pulled back off their best levels of the day but still closed firmly in positive territory. The Dow rose 108.36 points or 0.4 percent to 25,415.19, the Nasdaq advanced 41.78 points or 0.6 percent to 7,671.79 and the S&P 500 climbed 13.69 points or 0.5 percent to 2,816.29.
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Wednesday. Japan’s Nikkei 225 Index advanced by 0.9 percent, while Hong Kong’s Hang Seng Index slid by 0.9 percent.
Meanwhile, the major European markets have also moved to the downside on the day. While the French CAC 40 Index is just below the unchanged line, the German DAX Index is down by 0.6 percent and the U.K.’s FTSE 100 Index is down by 1.1 percent.
In commodities trading, crude oil futures are slumping $1.02 to $67.74 a barrel after tumbling $1.37 to $68.76 a barrel on Tuesday. Meanwhile, after rising $2.10 to $1,223.60 an ounce in the previous session, gold futures are falling $2.70 to $1,230.90 an ounce.
On the currency front, the U.S. dollar is trading at 111.87 yen compared to the 111.86 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is valued at $1.1692 compared to yesterday’s $1.1691.
by RTTNews Staff Writer
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