FIN: Global markets, U.S. futures dip ahead of U.S. Fed minutes and grim earnings expectations
U.S. stock index futures were slightly lower on Wednesday as investors eyed finer details of the Federal Reserve’s September policy meeting.
* The Fed stood pat on rates during the meeting, although three policymakers voted for a hike. The minutes will likely reveal how much of a push there was for a rate increase and the central bank’s views on the U.S. economy.
* The minutes will be released at 2:00 p.m. ET (1400 GMT).
* New York Fed President William Dudley and his Kansas counterpart Esther George’s appearances at separate events will be carefully watched for their take on rates.
* Oil prices were up 0.4 per cent as major producers meet in Istanbul where oversupply could be addressed.
* The markets are likely to be more volatile as the third-quarter earnings season will test relatively high valuations of stocks. The changing dynamics of the U.S. presidential elections and a strong possibility of a December U.S. interest rate hike are the other factors weighing on investors’ minds.
* Overall S&P 500 earnings are currently expected to fall 0.7 per cent in the third quarter, marking the fifth quarter of negative earnings in a row, according to Thomson Reuters data.
* Wall Street sold off on Tuesday as the first rush of corporate earnings, including those of Alcoa, were disappointing.
* Barracuda Networks shares rose 10.2 per cent to US$25.70 in premarket trading after the computer security and storage firm’s quarterly revenue beat analysts’ estimates.
* Apple was up 0.6 per cent after Mizuho raised the stock’s price target. The iPhone maker’s shares have risen for the past six days, gaining in part by rival Samsung’s issues with its Galaxy Note 7 phones and its eventual profit warning on Wednesday.
Global shares dipped worldwide towards three-week lows on Wednesday as a dour start to the U.S. earnings season weighed on sentiment, while Britain’s battered currency rose for the first time in five days.
Sterling rose more than 1 per cent versus the dollar and euro after British Prime Minister Theresa May offered to give lawmakers some scrutiny of the process of leaving the European Union.
The currency has taken a beating, tumbling to 31-year lows last week, on fears that Britain is heading for a “hard Brexit” that would see it leave the EU’s single market when it quits the bloc.
“After weeks of tough rhetoric pushing sterling into a trading environment closer to an emerging market currency, the government may aim to stabilize markets, with its rhetoric and suggestions now possibly shifting in tone,” Morgan Stanley’s head of currency strategy, Hans Redeker, said.
European shares followed Asian and U.S. markets lower, with Germany’s DAX, France’s CAC and Britain’s FTSE all nudging down in early trade.
Sweden’s Ericsson led the region’s technology stocks down to a one month-low after issuing a profit warning.
That followed disappointing earnings reports from aluminum producer Alcoa and diagnostics test maker Illumina on Tuesday, casting a cloud over the start of earnings season and knocking U.S. stocks lower overnight.
MSCI’s broadest index of Asia-Pacific shares outside Japan fell to three-week lows, leaving shares hovering near three-week lows touched on Tuesday.
Gold prices edged higher as the dollar retreated, and oil rose, drawing support from record Indian crude imports and upcoming talks between OPEC producers and other oil exporters on curbing output to end a glut in the global market.
