Wednesday December 11th

11-12-2019

US stock futures point to flat open ahead of the Fed rate decision

U.S. stock index futures were little changed Wednesday morning as investors waited to hear the Federal Reserve’s latest decision on monetary policy. Around 7:15 a.m. ET, Dow Jones Industrial Average futures pointed to a marginal gain at the open. S&P 500 and Nasdaq 100 futures also indicated slight increases to start off the session. The Fed is largely expected to keep rates unchanged. But Fed Chairman Jerome Powell is also expected to signal the central bank will take appropriate measures to keep liquidity high  and overnight lending rates steady to end the year. In its October meeting, the Fed decided to cut short-term lending rates to a range of 1.50% to 1.75%. Treasury yield dipped slightly, with the 10-year rate trading at 1.824%. The 2-year yield slipped to 1.642%. Wall Street also kept an eye on the trade front as there continues to be no clear indication that the U.S. and China will reach an agreement over trade that could stop or reduce the current level of tariffs. The U.S. is due to impose fresh duties on Chinese goods by Sunday. The Wall Street Journal reported Tuesday that the U.S. plans to delay these additional tariffs on Beijing as both sides try to work out an agreement. However, also on Tuesday, White House economic advisor Larry Kudlow said the Dec. 15 deadline is still “on the table.” On the data front, inflation numbers are due out at 8:30 a.m. ET and Federal budget figures are expected at 2 p.m. Major markets in Asia were mixed on Wednesday ahead of the U.S. Federal Reserve’s interest rate decision due later in the day stateside. Mainland Chinese stocks ended their trading day mixed, with the Shanghai composite up 0.24% to around 2,924.42. The Shenzhen component, on the other hand, shed 0.64% to 9,852.71. The Shenzhen composite also fell 0.445% to approximately 1,639.50. Hong Kong’s Hang Seng index rose about 0.8%, as of its final hour of trading. In Japan, the Nikkei 225 slipped fractionally to close at 23,391.86 while the Topix index declined 0.34% to end its trading day at 1,714.95. South Korea’s Kospi closed 0.36% higher at 2,105.62. Oil prices fell on Wednesday after industry data showed an unexpected build in crude inventory in the United States and as investors waited for news on whether a fresh round of U.S. tariffs on Chinese goods would take effect on Sunday. Brent futures fell by 35 cents, or 0.6%, to $63.98 per barrel. U.S. West Texas Intermediate crude slipped by 22 cents, or 0.4%, to $59.02 a barrel, down from a more than two-month high reached on Tuesday. Gold inched up on Wednesday as investors sought safety from the threat of new U.S. tariffs on Chinese goods coming into effect on Dec. 15, while also awaiting policy decisions from major central banks. Autocatalyst metal palladium held just shy of an all-time record high. Spot gold had gained 0.2% to $1,467.31 per ounce. U.S. gold futures rose 0.3% to $1,471.90.