Stock Futures Edge Higher Ahead of Fed's Forecasts
By Anna Isaac
Futures tied to the S&P 500% rose 0.5%, suggesting that the
broad gauge may open higher. Contracts tied to the Nasdaq Composite
Index ticked up 0.5%. Both benchmarks are in negative territory for
the month so far, with the Nasdaq down nearly 5% in September.
Investors are weighing the prospect of continued support from
the central bank against further delays to a fiscal spending
package expected from lawmakers. While the Fed isn't expected to
change interest rates Wednesday, policy makers may revise closely
watched economic and inflation projections.
"We're expecting to see an upgrade in the growth numbers for the
U.S.," said Edward Park, deputy chief investment officer at Brooks
Macdonald. "Last time, they were very bearish compared to what the
market had been expecting."
The meeting is the Fed's first since forging a new framework
governing how to conduct policy over the long run. Investors are
eager to get more guidance on how changes will work in
"There is room for market disappointment today if we don't get
any further details," said Seema Shah, chief strategist at
Principal Global Investors. "What is too long for inflation to be
above 2%? How far above that does it need to go before they start
Investors are also continuing to assess the prospects for
additional government spending, with negotiations complicated by
calculations surrounding prospects in the November elections. On
Tuesday, House Speaker Nancy Pelosi said the chamber should remain
in session until lawmakers can strike a bipartisan agreement on new
coronavirus relief. White House adviser Jared Kushner said that any
deal could be a ways off.
"The recent stronger economic data is convincing investors that
the economy is standing on its own two feet," said Ms. Shah. "But
if we get final confirmation that there'll be nothing before the
election, then there might be a negative reaction from the
U.S. retail sales data for August, due at 8.30 a.m. ET, may also
give investors a sense of consumers' confidence and the strength of
the economic recovery. The figures are expected to show another
rise in outlays across an array of categories, including
electronics and food services.
Overseas, the pan-continental Stoxx Europe 600 index rose
In Asia, major equity indexes ended the day on a mixed note.
Japanese stocks edged higher thanks to gains in e-commerce and
online-services stocks, sending the Nikkei 225 index up less than
0.1%. China's Shanghai Composite Index ticked down 0.4%.
In commodities, Brent crude, the international energy benchmark,
rose 2% to $41.38 a barrel after data showing that U.S. crude
inventories unexpectedly declined. Hurricane Sally, expected to
make landfall Wednesday, has curtailed offshore oil production in
the Gulf of Mexico, and is likely to further hit U.S. supply.
In bond markets, the yield on the benchmark 10-year U.S.
Treasury ticked up to 0.681%, from 0.678% Tuesday.
Write to Anna Isaac at email@example.com
(END) Dow Jones Newswires
September 16, 2020 06:20 ET (10:20 GMT)
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