Tuesday June 18th

18-06-2019

Dow futures rise 150 points ahead of Fed meeting

U.S. stock index futures rose on Tuesday as investors bet the Federal Reserve will set the stage for more accommodative monetary policy at this week’s meeting. Dow Jones Industrial Average futures traded 151 points higher, indicating a gain of 160 points at the open. S&P 500 and Nasdaq 100 futures also gained. Facebook was among the premarket leaders, rising more than 1% after launching a new cryptocurrency called Libra. The social media company partnered with Visa, PayPal and other companies that will accept Libra payments. The Fed is expected to leave rates unchanged after this meeting, which starts Tuesday. However, investors will monitor whether policymakers at the central bank lay the groundwork for rate cuts later in the year. Traders are pricing in three rate cuts before year-end, according to the CME Group’s FedWatch tool. Hope for looser monetary policy eased pressure in equities this month. The major indexes entered Tuesday’s session up at least 5% this month. The Fed’s decision is scheduled to be announced Wednesday at 2 p.m. ET. The meeting comes after jobs growth and manufacturing activity in May slowed down. This, coupled with lingering worries over U.S.-China trade has led to increasing worries over the global economy. Investors also cheered the prospects of more stimulative measures from Europe. Mario Draghi, president of the European Central Bank, said Tuesday: “In the absence of improvement, such that the sustained return of inflation to our aim is threatened, additional stimulus will be required.” Draghi’s comments sent the euro sliding against the dollar. They also jolted European stocks. The Stoxx 600 index climbed more than 1%, along with the German Dax and the French CAC 40. Trump criticized Draghi’s remarks, noting additional ECB stimulus makes it “unfairly easier ” for Europe to compete with the U.S. Builders started new homes at a pace of 1.269 million in May, the Commerce Department said Tuesday, above MarketWatch expectations for 1.23 million starts, but down on April’s pace and down 4.7% on the same month last year. They applied for permits at a seasonally adjusted annual 1.3 million rate, better than April’s rate and compared to estimates for 1.3 million. Markets in Asia were mostly higher on Tuesday as investors awaited the start of a closely-watched meeting by the U.S. Federal Reserve, set to kick off later stateside. Shares in mainland China rose on the day. The Shanghai composite was up slightly at 2,890.16 and the Shenzhen component gained 0.27% to 8,804.32, while the Shenzhen composite was higher by 0.163% to 1,504.57. In Hong Kong, the Hang Seng index added more than 1%, as of its final hour of trading. Over in South Korea, the Kospi gained 0.38% to close at 2,098.71. Japanese stocks bucked the overall trend. The Nikkei 225 slipped 0.72% to close at 20,972.71. The Topix index also declined 0.72% to end its trading day at 1,528.67. Oil prices fell for a second day on Tuesday on signs that global economic growth is being hit by the U.S.-China trade war, though losses were capped by Middle East tensions after last week’s tanker attacks. Brent crude futures were trading 18 cents down at $60.76 a barrel. U.S. West Texas Intermediate crude futures lost 3 cents to $51.90. Gold prices rose on Tuesday, having eased in the two previous sessions, supported by expectations of dovish statements from the U.S. Federal Reserve, which begins its two-day monetary policy meeting later in the day. Spot gold was up 1.09% at $1,353.85 per ounce. U.S. gold futures rose 1.11% to $1,357.1 an ounce.