Stocks Edge Higher Ahead of Fed Decision
June 19 2019 - 12:07PM
Dow Jones News
By Gunjan Banerji and Nathan Allen
The Dow Jones Industrial Average edged higher as investors
awaited the conclusion of the Federal Reserve's two-day policy
meeting, looking for clues on where interest rates are headed.
The Dow added 39 points, or 0.2%. The S&P 500 and Nasdaq
Composite were little changed.
Federal Reserve officials finish their meeting Wednesday after
debating whether to lower interest rates now or later this year.
The central bank releases its policy statement at 2 p.m. Eastern
time, and Fed Chairman Jerome Powell will hold a press conference
shortly after. Many investors expect the Fed to slash interest
rates later this year after holding them steady at this week's
meeting.
The stakes are high for Wednesday's policy statement. Such
expectations alongside a brightening outlook on trade have helped
major U.S. stock indexes rally toward their best June in decades.
The Dow, which is up 6.8% this month, is on track for its best June
performance since at least 1938. The S&P 500 has rallied 6%
this month and is about 1% away from its closing record.
But investors weren't in a rush to make big wagers ahead of the
meeting Wednesday.
"As far as the market overall, I think it's going to be hurry up
and wait until the Fed says something," said JJ Kinahan, chief
market strategist at TD Ameritrade. Mr. Kinahan said he's watching
for whether the Fed replaces language in its policy statement that
said the central bank would be patient in making further rate
changes.
Major stock indexes around the world also surged Tuesday after
European Central Bank President Mario Draghi signaled the ECB could
cut rates and expand its bond-buying program to shore up eurozone
inflation. The Bank of England is due to publish its own rate
decision Thursday, though analysts don't expect Gov. Mark Carney to
echo the ECB's stance.
Also adding to investors' optimism, Mr. Trump and Chinese
President Xi Jinping agreed to meet at the Group of 20 summit in
Japan, sparking hopes for a trade truce and driving up U.S. indexes
near their record highs.
Chinese equities led gains in Asia on Wednesday, where markets
welcomed upbeat comments on trade. Hong Kong's benchmark Hang Seng
Index rose 2.6%, the biggest one-day gain since November 2018. The
Shanghai Composite added 1%.
Still, some analysts remained cautious about both trade talks
and the outcome of the Fed meeting. The central bank has a
challenging task ahead in terms of crafting a message for
investors, especially after expectations of rate cuts this year
have increased. Additionally, Fed days haven't been good for stocks
over the past year and a half.
"The market right now is priced for perfection for today's
announcement, " said James Masserio, head of Americas
equity-derivatives trading at Société Générale SA. "And today's
announcement can only disappoint."
Write to Gunjan Banerji at Gunjan.Banerji@wsj.com
(END) Dow Jones Newswires
June 19, 2019 11:52 ET (15:52 GMT)
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