Stocks – U.S. Futures Edge Higher Ahead of Fed Announcement

This post was originally published on this site – U.S. stocks are set to edge higher at the open Wednesday, with investors showing caution ahead of the latest Federal Reserve meeting and with earnings season in full swing.

At 7:10 AM ET (1110 GMT), US 500 Futures traded 5 points, or 0.2%, higher, US Tech Futures up 50 points, or 0.5%. The Dow Futures contract rose 14 points, or 0.1%. 

The Federal Reserve concludes its two-day meeting later Wednesday, with investors looking for guidance on the U.S. economy’s recovery from the Covid-19 pandemic.

The risks to the recovery since the central bank’s last meeting appear to have grown substantially, given the spike in infections and the associated slowdown in economic activity in three of the country’s four most populous states — California, Florida and Texas — this month. 

The new Fed policy statement, to be released at 2 PM ET (1800 GMT), will show just how seriously U.S. central bankers assess them. The central bank has already indicated its concern, on Tuesday extending from Sept. 30 to Dec. 31 the availability of the emergency credit programs it set up early in the pandemic.

“The focus of monetary policy will now shift from stabilization to accommodation,” said analyst Morten Lund, at Nordea. “The accommodation tools currently being discussed are centered around forward guidance. Thus, a key lesson from the aftermath of the Global Financial Crisis was that monetary policy was tightened too early by not giving strong enough forward guidance, which eventually slowed the recovery.”

Also in the spotlight will be the heads of the Silicon Valley tech giants, with the CEOs of Facebook (NASDAQ:FB), Amazon (NASDAQ:AMZN), Google (NASDAQ:GOOGL) and Apple (NASDAQ:AAPL) set to testify at a hearing of the House antitrust subcommittee in Washington.

Meanwhile, the earnings season continues apace, with numbers expected Wednesday from the likes of Boeing (NYSE:BA), General Motors (NYSE:GM), General Electric (NYSE:GE), PayPal (NASDAQ:PYPL), Spotify (NYSE:SPOT), Qualcomm (NASDAQ:QCOM) and Boston Scientific (NYSE:BSX).

On Capitol Hill, Republicans and Democrats are scrambling to pass the latest stimulus measures before Friday, when some earlier measures are due to expire. 

Economic data centers around June pending home sales, at 10 AM ET, which are expected to rise 15% from the previous month, which itself showed a record jump of 44%.

Oil prices pushed higher Wednesday, helped by a surprise drop in U.S. inventories. U.S. crude futures traded 1.1% higher at $41.48 a barrel, while the international benchmark Brent rose 1.3% to $44.13.

Government crude oil stocks data are due at 10:30 AM ET, with analysts expecting an addition of 357,000 barrels for the week ending July 24, although the surprise drop in inventories recorded by American Petroleum Institute on Tuesday puts a big question mark next to that expectation.

Elsewhere, gold futures rose 0.4% to $1,952.20/oz, still at highly elevated levels, while EUR/USD traded at 1.1732, up 0.2%.

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