Stock futures are flat ahead of key Fed policy decisions

Focus on Fed announcement tomorrow, not 75 bps hike, Wells Fargo's Michael Schumacher says

Stock futures were little changed on Tuesday night as investors braced for the Federal Reserve’s latest policy decision at the conclusion of its meeting on Wednesday.

Futures linked to the Dow Jones Industrial Average were lower by 10 points. S&P 500 futures and Nasdaq 100 futures hovered on the flat line.

In regular trading, the major stock averages ended the day lower after September vacancies showed a robust labor market. The Dow fell about 79 points, or 0.2%. The S&P 500 lost 0.41%, and the Nasdaq Composite fell 0.89%.

Investors are awaiting a key policy decision from the Fed, which is widely expected to announce it will raise interest rates by three-quarters, its fourth consecutive increase of that size, in its ongoing efforts to combat high inflation. However, market players are looking for a signal that the central bank is prepared to slow down the pace of the interest rate increase plan in December.

“We’re looking for some guidance… 75 [basis points] is expected, it is going to hit, but what will be the guidance going forward? It’s all about what’s coming and what’s the pace of the next climbs,” said Victoria Greene, chief investment officer at G Squared Private Wealth. She spoke on CNBC’s “Closing Bell: Overtime.”

On Tuesday, the ISM industry index, which shows the proportion of companies that reported expansion in October, was 0.9 percentage points lower than in September. The JOLTS report showed 1.9 vacancies for every available worker.

“It’s just not a big number for the Fed, it’s still a tight labor market,” Greene said. “So I think they’re still between a rock and a hard place. They’re going to have to hike. Nobody likes that. Everybody wants them to stop, but it’s like a car crash in slow motion. They just can’t stop walking. “

In addition to the Fed’s policy decision, investors will also be watching for mortgage application data and the ADP employment report, both due Wednesday morning.

Earnings season continues Wednesday with healthcare companies including CVS Health, Humana and GlaxoSmithKline before the bell. Paramount and yum! Brands are also on the deck.

Source link

Back to top button