|09-15-2014, 04:22 PM||#1|
Wall Street looking weaker, Fed meeting awaited
U.S. stock futures hinted at a lower opening on Monday after disappointing Chinese factory data over the weekend and as investors wait for the Federal Reserve’s monetary policy meeting for signals on the interest rate hike timing.
Official figures from China on Saturday showed the country’s industrial output growth slipped in August to the lowest level since the 2008 global financial crisis, dealing a blow to companies and economies dependent on China.
Investors may also be keeping to the sidelines somewhat ahead of the two-day Federal Open Market Committee meeting, scheduled to begin Tuesday. They will be watching for clues on when the Fed expects to begin raising interest rates, listening to hear whether the hike could come sooner than expected.
The Fed has been holding down the federal funds rate near zero since the financial crisis, but a strengthening economy has lead to speculation that it will raise rates sooner than later. Most analysts predict the first rate hike will occur next summer.
In a worst case scenario, the Fed would raise rates too quickly, and the move would derail the stock market rally and the U.S. economy.
Keep an eye on the Fed`s policy statement Wednesday. The precise wording matters.
In previous statements, the Fed has said it intends to keep rates low for a "considerable time" until the job market improves and as long as inflation remains in check. If the Fed removes those two words, analysts say the markets could sell off as investors brace for a jump in rates.
As for today, the New York Fed’s Empire State index on manufacturing for September is expected at 8:30 a.m. Eastern Time, forecast to come in at 16.0, compared with 14.7 the previous month.
August readings on industrial production and capacity utilization follow at 9:15 a.m. Eastern Time.
Stock futures were flat with a negative bias before the opening.
-Futures on the Dow Jones Industrial Average fell 0.006% to 16905
-Futures on the S&P 500 index fell 0.056% to 1975.60
-Futures on the NASDAQ 100 gained 0.006% to 4062.25 . As of 08:08 a.m. ET
Yahoo Inc shares gained more than 8% last week and are expected to remain in the spotlight as Alibaba gets set to launch its IPO this week. Yahoo holds roughly a 23% stake in the Chinese e-commerce giant and intends to sell those during the IPO, raising the prospect of a big cash windfall.
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