Futures Higher As Investors Predict Fed’s Next Move
US stock futures gained Wednesday as the market looks ready to recoup from Tuesday’s weak performance.
Wednesday, October 8, 2014
Futures on the Dow and Nasdaq rose 0.2%, while futures on the S&P 500 added 0.3%. Companies are preparing their third-quarter earnings reports, which should impact the market. While the futures data is promising, it is not always an accurate predictor of the market’s direction for the day.
Tuesday’s close saw the Dow fall 272.52 points behind investors’ wariness of global growth. It was the third 200-point move in the last five sessions.
Economists search for clues
Investors are doing all they can to predict the time of the Federal Reserve’s interest rate hike, widely believed to come sometime in 2015.
Today, the Fed will release the details from the latest Federal Open Market Committee policy meeting which concluded September 18, according to Bloomberg.
“The Fed minutes will be vital for an indication as to the outlook for interest rate rises,” Nick Skiming of Ashburton Ltd. told Bloomberg. “Given the overall weakness in markets, the Fed may temper some comments. U.S. earnings also kick off today and, on a comparative basis from a year earlier, should be reasonably good. The commentary by the Fed will outweigh any short-term moves in the market.”
Analysts will also examine third quarter earnings reports from US corporations, kicked off by Yum Brands, owner of KFC and Taco Bell, reported poor Chinese sales but strength elsewhere. The next earnings report comes from aluminum producer Alcoa, which publishes its data after Wednesday’s close.
The stronger the US economy proves to be, the greater the likelihood that the Federal Reserve will soon raise interest rates from their near-zero benchmark.
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