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| | US Market | | The major U.S. index futures are pointing to a higher opening on Wednesday, with sentiment reflecting hopes that the Fed will not do anything drastic to hurt economic growth. Traders are likely to scout for cues on how the central bank is going to time its stimulus withdrawal. Even as the optimism stays, an economic report released earlier in the day showed that housing market recovery is gaining momentum and could add strength to the economic momentum. The market direction is largely likely to be determined by what the Fed has to say on its monetary policy stance. U.S. stocks ended a nervous pre-Fed decision session modestly lower on Tuesday, as traders anxiously looked ahead to whether the central bank will indeed decide to scale back its stimulus before the economic momentum returns in full. The major averages opened mixed, with The Dow Industrials showing volatility in early trading, while the Nasdaq Composite Index and the S&P 500 Index languished below the unchanged line. The averages moved uniformly lower until late afternoon trading, when The Dow and the Nasdaq Composite Index cut their losses but continued to trade amid volatility before closing slightly lower. The S&P 500 Index, which spent the bulk of the session below the unchanged line, ended down 5.54 points or 0.31 percent at 1,781. The Dow Industrials edged down 9.31 points or 0.06 percent to 15,875 and the Nasdaq Composite Index ended 5.84 points or 0.14 percent lower at 4,024.
Twenty-one of the thirty Dow components closed lower, while the remaining nine stocks advanced. Chevron , IBM , JP Morgan Chase , McDonald's and Verizon , declined sharply, while Visa and 3M Co. saw notable gains.
Airline and Biotechnology stocks were among the worst performers of the session, while Semiconductor stocks continued to gain ground. On the economic front, the results of the National Association of Home Builders' survey showed that its housing market index measuring confidence among builders rose to 58 in December from 54 in November. Economists expected a more modest improvement to 55. The present sales conditions index rose 6 points and the sales expectations index was up 2 points. Additionally, the index measuring prospective buyer traffic climbed 3 points to 44.
The Labor Department reported that consumer prices remained unchanged in November compared to the previous month, in line with estimates. Core consumer prices were up 0.2 percent, slightly steeper than the 0.1 percent increase expected by economists. Energy prices were down 1.0 percent and were responsible for the soft headline inflation. Declines in apparel prices and flat medical care costs also kept a lid on inflation.
The probability of a gyration is very much in the cards for the averages, as the closely watched FOMC catalyst materializes. Any allusion toward a pullback in stimulus may have a psychological impact on the market despite the resolve that the economy could withstand the move due to recent signals of a build up in the economic momentum. On the upside, The Dow Industrials faces resistances around 15,909, its 21-day MA of 15,962 and 16,013, while supports for the index lay around 15,846, 15,788, 15,737 and its 50-day MA of 15,690.
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| | US Economic Reports |  | | CADUSD | Oil | Gold | Allbanc |  |  |  |  | | Please click on the images to view our interactive charts | | | New residential construction showed a substantial increase in the month of November, according to a report released by The Commerce Department on Wednesday, with housing starts jumping to their highest level in over five years.
The report said housing starts surged up 22.7 percent to a seasonally adjusted annual rate of 1.091 million in November from a rate of 889,000 in October. Economists had expected housing starts to come in at an annual rate of 955,000.
The Energy Information Administration is due to release its weekly petroleum status report for the week ended December 13th at 10:30 am ET. Crude Oil inventories fell by 10.6 million barrels to 375.20 million barrels in the week ended December 6th. Notwithstanding the drop, inventories remained above the upper limit of the average range.
Meanwhile, gasoline stockpiles rose by 6.7 million barrels and were above the upper limit of the average range. Distillate inventories increased by 4.5 million barrel yet were in the lower limit of the average range. Refinery capacity utilization averaged 90.7 percent over the four weeks ended December 6th compared to 89.7 percent over the four weeks ended November 29th.
The Federal Reserve is scheduled to release its monetary policy statement at 2 pm ET following the conclusion of the 2-day meeting. The central bank is set to unveil its forecasts at 2 pm and Chairman Ben Bernanke will address a post-meeting press conference at 2:30 pm ET.
The Treasury Department will announce the results of the auction of its 5-year notes at 11:30 am ET. |
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| | Stocks in Focus | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  |  |  |  | | Please click on the images to view our interactive charts | | | FedEx reported better than expected second quarter. Revenues rose 3 percent year-over-year and were about in line with estimates.
Verifone reported fourth quarter non-GAAP earnings of 27 cents per share on net revenues of $432 million. For the full year, the company expects non-GAAP earnings of $1.35-$1.40 per share on non-GAAP net revenues of $1.77 billion to $1.80 billion. The results exceeded estimates, while the guidance was weak.
Jabil Circuit announced an agreement to sell its aftermarket services business to iQor for $725 million. Separately, the company reported first quarter core earnings of 51 cents per share on net revenues of $4.6 billion, flat with last year. The earnings trailed expectations, while the revenues were ahead of estimates. For the second quarter, the company expects core earnings of 5-15 cents per share on net revenues of $3.5 billion to $3.7 billion. The guidance was weak. The company also said its board authorized a $200 million stock repurchase plan.
Steel Dynamics said it expects fourth quarter earnings of 21-25 cents per share, below the consensus estimate of 26 cents per share.
Parkway Properties announced that its stockholders approved its previously announced acquisition of Thomas Properties Group .
BorgWarner announced that it has agreed to acquire all shares in valves, tubes and thermostat maker Gustav Wahler. The target company had annual sales of about $350 million for 2013. The deal is expected to close in the first quarter of 2014.
Integrated Device Technology announced the appointment of Greg Waters as its president and CEO, effective January 6th, 2014, replacing Jeff McCreary, who served as the interim CEO.
Apogee Enterprises , Herman Miller , Oracle and Paychex are among the companies due to release their quarterly results after the close of trading.
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| | European Market | | European stocks started higher and have been firmer since then, as traders digest some positive domestic data on German business sentiment and look ahead to the FOMC announcement.
On the economic front, the results of a survey by the IfO Institute showed that German business sentiment improved in December. The improvement was in line with expectations. The business climate index edged up 0.2 points to 109.5.
A report released by the U.K. Office for National Statistics showed that the number of people seeking jobseeker's allowance in the U.K. fell by 36,700 to 1.27 million in November, the lowest since January 2009. Economists were expecting claims to fall by 35,000. The jobless rate edged down 0.3 percentage points to 7.4 percent in the three months ended July.
The minutes of the Bank of England's December monetary policy meeting showed that the decision to maintain interest rates and quantitative easing unchanged was unanimous. |
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| | Asian Markets | | | | USDCAD | USDEUR | USDGBP | USDJPY |  |  |  |  | | Please click on the images to view our interactive charts | | | The major Asian markets ended the session on a mixed note, with traders remaining tentative as they looked ahead to the Fed decision. The Taiwanese, Singaporean, New Zealand, Malaysian, Chinese and Australian markets declined, while the rest of the major markets advanced.
The Japanese market advanced for the second straight day, with the Nikkei 225 average jumping sharply in early trading. Thereafter, the index rose steadily before closing up 309.17 points or 2.02 percent at 15,588. The market witnessed broad based strength.
Australia's All Ordinaries showed volatility throughout the morning before moving decisively lower in the afternoon. After languishing below the unchanged line in the afternoon, the index ended 6.80 points or 0.13 percent lower at 5,099.
Consumer, energy and healthcare stocks came under selling pressure, offsetting the modest strength in the financial and material spaces.
China's Shanghai Composite Index ended down 2.79 points or 0.13 percent at 2,148, while Hong Kong's Hang Seng Index closed at 23,144, up 74.59 points or 0.32 percent.
On the economic front, a report released by Japan's Ministry of Finance showed that the nation's trade deficit widened to 1.292 trillion yen in November from a deficit of 1.092 trillion yen in October, while economists expected a deficit of 1.351 tril yen. Exports rose 18.4 percent year-over-year, while imports climbed a steeper 21.1 percent.
The Conference Board's leading index for economic activity in China rose 1.4 percent month-over-month in November following a 0.7 percent increase in October. A separate report released by the Chinese National Bureau of Statistics showed that house prices in China rose year-over-year in almost all major Chinese cities in November. Prices in 69 of the 70 cities surveyed increased in November. |
| | Currency and Commodities Markets | | Crude Oil futures are rising $0.13 to $97.60 a barrel after slipping $0.26 to $97.22 a barrel on Tuesday. An ounce of Gold is trading at $1,231.60, up $1.50 from the previous session's close of $1,230.10. On Tuesday, Gold fell $14.30.
Among currencies, the U.S. dollar is trading at 103.06 yen compared to the 102.67 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is valued at $1.3744 compared to yesterday's $1.368.
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