BLBG: U.S. Stock-Index Futures Decline Ahead of Yellen's Speech
Stocks down 4 out of 5 days since Fed kept rates last week
Fed's Janet Yellen to deliver lecture after U.S. markets close
Uncertainty over the Federal Reserve’s stimulus policy prevailed among investors, sending U.S. stock-index futures lower, with the Standard & Poor’s 500 Index at its lowest level in almost three weeks.
S&P 500 E-mini contracts expiring in December slipped 1 percent to 1,909 at 7:19 a.m. in New York, after swinging between gains and losses. The equity gauge fell for the fourth time in five days yesterday as a rout in crude prices weighed on commodity stocks. Dow Jones Industrial Average futures dropped 142 points, also 0.9 percent to 16,045 today.
Confusion over the Fed’s actions has made equities more volatile in past weeks. The central bank held off raising rates last week and said it would consider spillover risks from global markets. Fed officials have since said a 2015 increase is still warranted. Traders may get more clarity when Chair Janet Yellen speaks in Massachusetts after markets close.
“Everyone’s trying to figure out what’s happening in emerging markets and how it will affect the global economy,” said Alessandro Bee, strategist at Bank J Safra Sarasin Ltd. in Zurich. “There’s still a lot of uncertainty there and the data hasn’t really been reassuring. The Fed knows just as much as we do. They can hike and they want to hike, but slowing growth is holding them back.”
Fed Odds
Traders are split on whether the Fed will raise rates this year. They are pricing in about a 43 percent chance of an increase in December, and 51 percent probability in January.
Investors will also look to U.S. data today for pointers on possible Fed action. Economists predict new home sales rose 1.6 percent last month, while orders for durable goods fell for the first time since May. A third estimate tomorrow will confirm the U.S. economy expanded 3.7 percent in the second quarter, according to projections.
Fiat Chrysler Automobiles NV lost 3.8 percent in premarket trading, following European carmakers lower. Chairman John Elkann said today that the Volkswagen AG cheating case was “very serious” and that consolidation is needed in the car industry.
Chubb Corp. slid 5.4 percent. A bill to help protect individual privacy from civilian drones could be included in U.S. legislation, which may limit Chubb’s use of the devices for inspection, according to Bloomberg Intelligence analysts Brad Barker and Eugenie Lejeune.
