FOX: Wall Street Looks for Higher Open After Fed Decision
U.S. equity futures pointed to a higher open on Monday morning as traders looked ahead after the Fed’s rate decision last week.
As of 8:00 a.m. ET, Dow Jones Industrial Average futures were 109 points higher, or 0.67% to 16428. S&P 500 futures gained 12 points, or 0.65% to 1963, while Nasdaq 100 futures added 26 points, or 0.62% to 4335.
Today’s Markets
Wall Street was poised to regain a bit of momentum lost at the end of last week that forced the broader U.S. averages to cap the week in negative territory as investors looked to life after September rate-hike speculation.
On Thursday last week, the Federal Reserve opted to keep short-term interest rates unchanged at historic lows of near-zero. Now the speculation moves from whether the Fed will hike this month, to whether the central bank will begin to raise rates at all this year.
The first post-September meeting speaker, Atlanta Fed President Dennis Lockhart, will take the podium at the Buckhead Rotary Club at 1:00 p.m. Monday.
Chris Beauchamp, senior market analyst at IG, said in a note, with only existing home-sales data on the U.S. economic calendar Monday, action will most likely continue to be driven by the Fed decision.
“With little fresh news over the weekend to drive trade, what we are seeing this morning is a rebalancing of positions as shorts take profits from Friday’s big downward move and brave buyers step in once again,” he said.
At 10:00 a.m., The National Association of Realtors will release the latest report on sales of existing single-family homes for the month of August. Home sales are expected to have fallen slightly to an annualized rate of 5.52 million units during the month, from 5.59 million units in July.
Looking ahead this week, Wall Street traders will also get the latest reading on durable goods orders, new home sales, consumer sentiment, and the final reading on second-quarter gross domestic product.
“The week will get busier once PMIs from China, the eurozone and the U.S. are out, and then the real test of bullish sentiment will be seen. Overall, Janet Yellen’s caution is still the thing that weighs most heavily on everyone’s minds,” Beauchamp said.
Elsewhere in the market, crude oil prices rose steadily on Monday after prices plunged in the previous session. U.S. crude was up 1.79% to $45.48 a barrel, while Brent, the international benchmark rose 1.73% to $48.29 a barrel.
Analysts at Barclays call recent price action in the oil patch the “great compression” resulting from a changing North-American landscape, less oil availability in the Atlantic Basin, and global-growth concerns.
“The North American oil market is being affected by several themes including reduced light oil output and light oil processing capacity expansions…recent data out of the EIA have shown that U.S. oil production has begun to decline, and we expect this trend to continue in the current price environment,” analysts wrote in a note Monday.
Meanwhile, gold prices continued to edge lower, trading down 0.70% to $1,129 a troy ounce, while silver declined 0.48% to $15.08 an ounce. Copper traded up 0.40% to $2.40 a pound.
“The dovish FOMC meeting with increased uncertainty is bullish on gold in the short term,” Barclays analysts wrote. “Currently, gold lacks price support from the physical supply side as FX moves in producer countries are likely to have pushed the marginal cash cost below $1,000/oz. With a major demand story also missing, we think gold should continue to trade around Fed rate expectations.”
Global markets were mixed on the first trading day of the week as investors continue to reposition after the Fed’s Thursday announcement.
In European markets, the Euro Stoxx 50, which tracks large-cap companies in the eurozone rose 1.03%. The French CAC 40 added 1.26%, while the German Dax tacked on 0.11% and the UK’s FTSE 100 gained 0.88%.
In Athens, Greece, shares declined nearly 1% after former Prime Minister Alexis Tsipras’s party, Syriza, won reelection amid low voter turnout after the PM stepped down from his post and announced snap elections following the summer’s dramatic debt discussions that resulted in more austerity.
In Asia, China’s Shanghai Composite Index jumped 1.89%, while Hong Kong’s Hang Seng declined 0.75% and Japan’s Nikkei slid 1.96%.
The U.S. dollar traded higher against a handful of global currencies, while the euro declined 0.37% against the greenback. The yield on the benchmark U.S. 10-year Treasury bond rose 0.037% percentage point to 2.169%.
