MW: U.S. markets: Stock futures higher with eyes on inflation, Fed
MADRID (MarketWatch) — U.S. stock futures were solidly higher on Wednesday, but big economic events were looming, including a reading on consumer prices and a Federal Open Market Committee meeting that could determine whether more volatility is in store for markets.
But investors were wary after the turbulence that swept through markets on Tuesday. Oil prices remained under pressure Wednesday, while the Russian ruble was seesawing amid reports the central bank was selling its foreign currency reserves.
Futures for the Dow Jones Industrial Average DJH5, +0.35% jumped 85 points, or 0.5%, to 17,090, while those for the S&P 500 index SPH5, +0.54% added 11 points, or 0.6%, to 1,976.10. Those for the Nasdaq-100 index NDH5, +0.63% gained 21.50 points, or 0.5%, to 4,107.75.
A volatile day saw the slide in oil and the ruble spill across all markets Tuesday, sending the Dow industrials DJIA, -0.65% 0.7% lower and the S&P 500 SPX, -0.85% to a nearly 1% loss. The declines came near the close, reversing attempts at a rally. It was the third straight day of losses for both indexes.
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Markets observers are struggling to find a clear explanation for Wednesday’s rise in stock futures. Stephen Guilfoyle, chief economist at Sarge986.com, said in emailed comments that it could be some pre-Fed optimism, but noted, “we don’t know where they’ll be in an hour,” in reference to the volatile state of markets.
The Fed, inflation: Consumer prices for November will be released at 8:30 a.m. Eastern Time. Economists polled by MarketWatch expect core prices, which strip out food and energy, to rise 0.2%, while the headline number is seen down 0.1%. Investors will be watching to see what kind of effect falling oil prices have had on the index.
As for the Federal Reserve, the policy decision is due at 2 p.m. Eastern Time, and a news conference with Fed Chairwoman Janet Yellen follows at 2:30 p.m. Eastern. “It is the most important event of the day, during which investors could be given their Santa Rally, provided that the Fed remain dovish and play down the possibility of any rate hike during the next year,” said Naeem Aslam, chief market analyst at AvaTrade, in emailed comments. The three most important things to watch during Fed meeting
Specifically, investors want to see if the Fed will strip the “considerable time” phrase from its statement, which would hint at a more hawkish stance. But investors also want to see if and how Yellen addresses the Russian crisis and plunging oil prices. WSJ’s Hilsenrath: Fed likely to look past Russia turmoil
Crude inventories due later: Pressure stayed on oil prices, with U.S. crude futures CLF5, -1.52% under $55 and Brent crude LCOG5, -0.95% under $60, ahead of potentially market-moving supply data.
“The commodity could be in store for another panic-fuelled drop this afternoon, as the U.S. announces its crude oil inventories; this announcement last week was one of the causes for oil’s last plunge, so it will be eyeing this figure carefully,” noted Connor Campbell, financial analyst at SpreadEx, in a note.
Gold GCF5, +0.29% traded under $1,200 an ounce, clinging to gains as the dollar USDJPY, +0.49% muscled back somewhat against the yen, amid a small rebound for the Nikkei 225 index NIK, +0.38% Most other Asian markets gained as well.
While U.S. futures were up, European stocks SXXP, -0.38% were in the red. Greek lawmakers are due to hold a first vote late Wednesday on the country’s next head of state.
Volcano among stocks to watch: Royal Philips said Wednesday it will buy Volcano Corp. for a total of $1.2 billion, including its equity and cash and debt, sending shares of the imaging therapy group 54% higher in premarket trading.
