Wall Street Futures Rebound Overnight

Wall Street Futures Rebound Overnight

Wednesday’s stock futures gained after declining for two straight days, the Wall Street Journal reported. The Dow, S&P 500 and Nasdaq futures all increased 0.3%, paring back Tuesday’s losses. The better performance this morning buoyed investors’ hopes for a strong day, although stock futures are not necessarily reliable predictors of the day’s market movement.

Wall Street Futures Rebound Overnight
Wall Street Futures Rebound Overnight

Federal Reserve to tighten policy soon
Recent advances in the US stock market have been attributed to the Fed’s stimulus efforts and low interest rates. So far this year, the Dow has grown 2.9% and the S&P 500 is up 7.3%. But some experts believe the Fed is ready to relinquish some of its control and give the market more leeway.

"Most of the talking points … are all going to be about [monetary policy] normalization," Peter Kenny, chief market strategist at Clearpool Group, told the Wall Street Journal. "That is going to drive some real volatility in the market."

Many investors anticipate an interest rate hike sometime in the first half of 2015.

New home sales data set for release
This morning, the US Commerce Department will release its August new-home sales report, according to MarketWatch. After a disappointing setback in July – the annual sales rate reached a 4-month low of 412,000 – analysts predict the August number to rise.

One positive factor is the NAHB Housing Market Index in August, which registered a “healthy reading above 50 [indicating growth],” Crédit Agricole economist Philippe Vilasboas told MarketWatch. He continued, “sentiment improved in the Northeast and Midwest regions where sales have fallen over the past two months.”

According to the Wall Street Journal, data on Monday indicated a 1.8% decline from July to August in sales of previously-owned homes, breaking a 4-month streak of growth. Peter Kenny explained that markets are hesitant to make significant moves until the crucial housing market establishes a trend, even in the face of other positive data.

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