The major U.S. index futures are pointing to a higher opening on Tuesday, with stocks poised to extend a recent upward move.
Stocks may continue to benefit from recent upward momentum, with traders shrugging off a recent batch of disappointing economic data.
Trading activity may be somewhat subdued, however, as traders may be reluctant to make significant moves ahead of the Federal Reserve’s monetary policy announcement on Wednesday.
While the Fed is widely expected to leave interest rates unchanged, traders will be looking for clues about the outlook for monetary policy.
Extending the upward move seen last week, U.S. stocks climbed to fresh record highs on Monday amid hopes the worst of the North Korea crisis is over.
The Dow rose 63.01 points or 0.3 percent to 22,331.35, the Nasdaq inched up 6.17 points or 0.1 percent to 6,454.64 and the S&P 500 edged up 3.64 points or 0.2 percent to 2,503.87.
Risk appetite continues to pick up thanks to healthy corporate earnings and expectations the U.S Federal Reserve will keep interest rates low for the time being. The Fed meets Tuesday and Wednesday.
U.S. Secretary of State Rex Tillerson told CBS the U.S. seeks a “peaceful solution” and wants to “bring North Korea to the table for constructive, productive dialogue.”
There was little reaction to a report from the National Association of Home Builders showing a bigger than expected drop in homebuilder confidence, as the data was impacted by recent hurricanes.
The report said the NAHB/Wells Fargo Housing Market Index dropped to 64 in September from a downwardly revised 67 in August.
Economists had expected the housing market index to edge down to 67 from the 68 originally reported for the previous month.
“The recent hurricanes have intensified our members’ concerns about the availability of labor and the cost of building materials,” said NAHB Chairman Granger MacDonald.
He added, “Once the rebuilding process is underway, I expect builder confidence will return to the high levels we saw this spring.”
Banking, housing, and brokerage stocks strengthened, while gold stocks moved lower as the precious metal loses its safe haven appeal.
Commodity, Currency Markets
Crude oil futures are rising $0.41 to $50.32 a barrel after inching up $0.02 to $49.91 a barrel on Monday. Meanwhile, after slumping $14.40 to $1,310.80 an ounce in the previous session, gold futures are edging up $0.40 to $1,311.20 an ounce.
On the currency front, the U.S. dollar is trading at 111.47 yen compared to the 111.57 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is valued $1.1988 compared to yesterday’s $1.1954.
Most Asian stocks fell on Tuesday, even as Japanese shares surged as traders returned to their desks after a long holiday weekend.
Underlying sentiment remained cautious as investors awaited clues from the Fed and BoJ meetings.
At a two-day policy meeting beginning later today, the Federal Reserve is expected to announce details on its trillions balance sheet unwinding.
The Bank of Japan holds its regular policy meeting on Thursday with many expecting no change in its monetary policy stance.
Chinese stocks fell slightly as liquidity worries resurfaced before the National Day holiday. The benchmark Shanghai Composite eased 0.18 percent to finish at 3,356.84 while Hong Kong’s Hang Seng index was down 0.35 percent at 28,061 in late trade.
Japanese shares hit more than two-year high as the dollar rose to an eight-week high against the yen ahead of the Fed meeting that gets underway later today. Also, speculation was rife that Prime Minister Shinzo Abe will soon decide on calling a snap election.
The Nikkei average climbed 389.88 points or 1.96 percent to 20,299.38, the highest level since August 2015. The broader Topix index closed 1.77 percent higher at 1,667.88.
Financials closed broadly higher, with Mitsui Financial Group, Nomura, Mitsubishi UFJ Financial and Sompo Holdings rallying 3-5 percent.
Among exporters, Nissan Motor, Panasonic and Toyota jumped 2-4 percent. Nintendo shares soared over 7 percent to hit a nine-year high after Credit Suisse raised its rating on the stock.
Australian shares closed marginally lower even as housing and consumer confidence data painted a positive picture of the economy and minutes from the Reserve Bank’s September 5 meeting came broadly in line with estimates.
The benchmark S&P/ASX 200 index slid 7 points or 0.12 percent to 5,713.60 while the broader All Ordinaries index ended down 6.60 points or 0.11 percent at 5,772.40.
Banks ended mostly lower despite U.S. stocks hitting record highs overnight bolstered by financials. Miners Rio Tinto and Fortescue Metals Group eked out modest gains as aluminum and copper prices strengthened.
TPG Telecom rallied 5.2 percent after its full-year profit beat analysts’ forecasts. Wellard shares soared 16 percent as the country’s biggest cattle exporter agreed terms for its first shipment of beef cattle to China.
European stocks are mixed on Tuesday as caution has crept in ahead of a two-day policy meeting of the Federal Reserve staring later today, with investors looking for hints on future U.S. monetary policy.
Meanwhile, the day’s economic reports were mostly positive. Germany’s economic confidence strengthened notably in September, survey data from the Mannheim-based Centre for European Economic Research/ZEW showed. The headline index rose by 7 points to 17.0.
The euro area current account surplus increased in July on higher primary income, the European Central Bank reported. The current account surplus increased to a seasonally adjusted 25.1 billion euros in July from 22.8 billion euros in June.
The pan-European Stoxx 600 index was down 0.1 percent at 381.64 in late opening deals after rising 0.3 percent the previous day.
The German DAX was also declining 0.1 percent, while France’s CAC 40 index was up 0.1 percent and the U.K.’s FTSE 100 was adding 0.2 percent.
Heineken NV tumbled 3.5 percent after Mexico’s Femsa said it had sold a 5.24 percent stake in the world’s second largest brewer for 2.5 billion euros (2.21 billion pounds).
Solvay dropped 1.4 percent. The Belgium-based multi-specialty chemical company has entered into a binding agreement with German chemical company BASF for the sale of its Polyamides business for an enterprise value of 1.6 billion euros.
Ocado Group shares slumped 4.3 percent in London. The online grocery delivery company reported higher sales in its third quarter, but signaled a further hit to earnings from costs of setting up new distribution centers.
Telia Company rose 1.3 percent after the Scandinavian telecom operator sold about 153.5 million shares in Turkcell Iletism Hizmetleri A.S.
U.S. Economic Reports
New residential construction in the U.S. unexpectedly decreased in the month of August, according to a report released by the Commerce Department.
The report said housing starts fell by 0.8 percent to an annual rate of 1.180 million in August from a revised 1.190 million in July. Economists had expected housing starts to jump by 1.7 percent.
A separate report released by the Labor Department showed increases in U.S. import and export prices in the month of August.
The Labor Department said imports prices climbed by 0.6 percent in August after edging down by 0.1 percent in July. Economists had expected import prices to rise by 0.4 percent.
The report said export prices also rose by 0.6 percent in August following a 0.5 percent increase in the previous month. Export prices had been expected to edge up by 0.2 percent.
by RTT Staff Writer
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