Stocks Nearly Flat As All Eyes Are On The Fed
With traders reluctant to make any significant moves ahead of the announcement of the Federal Reserve's
latest monetary policy decision, stocks are showing a lack of direction
in early trading on Thursday. The major averages remain stuck near the
unchanged line after opening roughly flat.
Currently, the major averages remain nearly flat, showing moves off less than a tenth of a percent. The S&P 500 is down 0.30 points at 1,436.26, while the Dow is up 1.58 points at 13,334.93 and the Nasdaq is up 1.17 points at 3,115.48.
The choppy trading on Wall Street comes
as traders are largely staying on the sidelines ahead of the release of
the Fed's monetary policy statement at about 12:30 pm ET.
Many analysts expect the central bank
to announce another round of quantitative easing as part of an effort
to stimulate the sluggish economy, although others have predicted that
the Fed will only extend its pledge to keep interest rates at
exceptionally low levels.
A lack of additional stimulus could
lead to a sell-off on Wall Street, as stimulus hopes have helped to push
the markets higher in recent weeks.
Following the announcement, the Fed will
unveil its latest economic forecasts at 2 pm ET, and Fed Chairman Ben
Bernanke will hold a press briefing beginning at about 2:15 pm ET.
As
a result of the focus on the Fed, traders have largely shrugged off a
report from the Labor Department showing a bigger than expected increase
in weekly jobless claims.
Labor Department officials
noted that the increase in jobless claims was partly due to the impact
of Hurricane Isaac, as major storms can often delay unemployment
filings.
A separate report from the Labor Department showed that a
substantial rebound in energy prices contributed to a bigger than
expected increase in producer prices in the month of August.
While
most of the major sectors are showing only modest moves in early
trading, housing stocks are giving back some ground after moving sharply
higher on Wednesday. The Philadelphia Housing Sector Index is down by 1.1 percent, pulling back off yesterday's four-year closing high.
Steel, oil service, and brokerage stocks are also seeing early weakness, while some strength is visible among telecom stocks.
In
overseas trading, stock markets across the Asia-Pacific region turned
in a mixed performance during trading on Thursday. While Japan's Nikkei 225 Index rose by 0.4 percent, Hong Kong's Hang Seng Index edged down by 0.1 percent.
The major European markets have also turned mixed on the day. The U.K.'s FTSE 100 Index has inched up by 0.1 percent, while the German DAX Index has fallen by 0.6 percent and the French CAC 40 Index has tumbled by 1.3 percent.
In
the bond market, treasuries have moved to the upside amid optimism
about the possibility of further quantitative easing. Subsequently, the
yield on the benchmark ten-year note, which moves opposite of its price,
is down by 4 basis points at 1.725 percent.
| Canadian Market Report |
 |
| CADUSD | Oil | Gold | Allbanc |
 |  |  |  |
| Please click on the images to view our interactive charts |
|
TSX Slips At Open Thursday
Bay
Street stocks moved down at open Thursday as traders were cautious
ahead of the outcome of the two-day Federal Reserve meeting, with the S&P/TSX Composite Index shedding 35.31 points or 0.29 percent to 12,197.31.
The Diversified Materials
Index slipped nearly 1 percent, with Teck Resources losing nearly 3
percent. First Quantum Minerals and Inmet Mining were down marginally.
Among gold stocks, Kirkland Lake Gold lost over 7 percent. Alamos Gold Inc. and Seabridge Gold were down over 2 percent each.
In the oil patch, MEG Energy and Celtic Exploration
were down around 2 percent each. Meanwhile, integrated tourist operator
Transat A.T. Inc. soared over 15 percent after it swung to profit in
third-quarter.
The price of gold was firm near its seven-month high Thursday morning amid speculation the Federal Reserve will
opt for further monetary easing measures to help lift the sagging U.S.
economy. Gold for December eased $0.20 to $1,733.50 an ounce.
In corporate news from Canada, integrated
tourist operator Transat A.T. Inc. swung to profit in third-quarter,
reporting net income of C$9.4 million or C$0.25 per share compared to a
loss of C$2.8 million or C$0.07 per share last year.
Diversified natural resources company Altius Minerals Corp.
reported a wider first quarter net loss of C$2.9 million or C$0.10 per
share, compared to net loss of C$1.6 million or C$0.06 per share last
year.
Empire Co. Ltd. posted improved first quarter net
earnings of C$108.9 million or C$1.60 per share versus C$89.2 million or
C$1.31 per share last year. The company declared a quarterly dividend
of 24 cents per share.
In economic news Statistics Canada said
the New Housing Price Index (NHPI) rose 0.1 percent in July, following a
0.2 percent increase in June. On a year-over-year basis, the NHPI rose
2.3 percent in the 12 months to July, following a similar year-over-year
increase the previous month. The main contributor to the advance was
the combined metropolitan regions of Toronto and Oshawa.
| European Market Report |
| |
| FTSE 100 | Euronext | Dax perf | CAC 40 |
 |  |  |  |
| Please click on the images to view our interactive charts |
|
European Markets Mixed Ahead Of Fed Announcement
The European markets are
mixed in afternoon trading Thursday, ahead of the conclusion of the
Federal Open Market Committee meeting in the U.S. There is talk that the
Fed may give clues on another round of quantitative easing, while some
analysts believe it is not possible as the Operation Twist is yet to
complete its course.
The monthly bulletin released by the European Central Bank
said Euro area policymakers should act effectively to contain renewed
intensification of financial market tensions as it has the potential to
disrupt the balance of risks for both growth and inflation.
Meanwhile,
IHS Global Insight Chief UK and European Economist Howard Archer said
the marginal increase in Eurozone's industrial production in July does
not dilute concerns over the health of the sector or reduce belief that
the bloc is headed for further GDP contraction in the third quarter.
Elsewhere, Dutch Prime Minister Mark Rutte has claimed victory
for his free-market and pro-European VVD Party in Wednesday's
parliamentary elections. The election was widely seen as a referendum on
the Netherlands' continued commitment to the 27-member European Union
amid the ongoing sovereign debt crisis.
The Euro Stoxx 50 index of eurozone bluechip stocks is falling 0.45 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, is losing 0.09 percent.
The German DAX is losing 0.34 percent and the French CAC 40 is falling 0.62 percent. The UK's FTSE 100 is edging up 0.05 percent and Switzerland's SMI is gaining 0.21 percent.
In Frankfurt, Deutsche Boerse is losing 1.3 percent. Commerzbank is falling 1.1 percent and Deutsche Bank is moderately lower. Volkswagen, Daimler and BMW are in negative territory.
Beiersdorf
is marginally higher after HSBC cut its rating on the stock. Outside
the main index, Nemetschek is gaining 3.2 percent after Berenberg
initiated the stock with a "Buy" rating. Autodealer Leoni is advancing
1.2 percent. Goldman Sachs raised the stock to "Buy" from "Neutral."
In Paris, EADS is
declining 8.5 percent. The plane maker confirmed it is in talks for a
possible merger with BAE Systems to create an industry giant that would
surpass rival Boeing Co. in terms of sales. Citigroup cut the stock to
"Neutral" from "Buy." BAE Systems is losing 6.2 percent in London.
Vinci is losing 2.7 percent and Bouygues is falling 1.8 percent.
Societe Generale, Credit Agricole and BNP Paribas are declining between 2.2 percent and 1.4 percent. Peugeot is losing 1.5 percent while Renault is fractionally higher.
Bucking the trend, Alcatel Lucent is gaining 1.7 percent. Total is gaining 0.5 percent. Citigroup raised its rating on the stock.
In London, Next is
losing 5.8 percent after issuing a cautious outlook amid disappointing
sales in an unusual August and early September. Marks & Spencer and
Kingfisher are notably lower.
Home Retail is falling 4.6
percent. The retailer said sales at its subsidiary store Argos edged up
in the second quarter, while sales at Homebase were hurt by poor weather
conditions.
Miners are trading in the red. Antofagasta and
Anglo American are moderately down while Rio Tinto is losing 1.9
percent. ARM Holdings is gaining around 1 percent after Apple introduced
iPhone 5.
Premier Farnell is surging 11 percent after the
electronic components distributor said it continues to expect growth to
return in the second half of the year. Dewhurst is climbing 10 percent. The firm sees annual pre-tax profit significantly ahead of market view.
|
| Asia Market Reports |
Asian Stocks Cautious Ahead Of FOMC Meeting
Asian stocks ended
mixed on Thursday as positive sentiment in the wake of a crucial German
court ruling on the Eurozone bailout fund gave way to caution ahead of
Fed decision.
It is widely expected that Fed Chairman Ben Bernanke
will announce a third round of asset purchases and extend the central
bank's low-rate guidance into 2015 as the FOMC meeting draws to a close
tonight. In an Aug. 31 speech in Jackson Hole, Wyoming, Bernanke
defended the extraordinary steps the Fed has taken to date, saying two
rounds of QE between 2008 and 2011 had created 2 million jobs and
accelerated U.S. economic growth.
In news out of Europe, voters
in the Netherlands overwhelmingly backed two pro-European centrist
parties committed to debt-busting austerity, dispelling concerns that
radical eurosceptics might gain sway in a core euro zone country.
Japanese stocks rose modestly on speculative buying due to pre-settlement trading. The Nikkei average rose 0.4 percent, while the broader Topix index of all First Section issues on the Tokyo Stock Exchange gained 0.3 percent.
Companies
that have business ties with Apple gained ground after the U.S.
technology giant unveiled its next generation iPhone at a special event
in San Francisco on Wednesday. TDK climbed 3.7 percent and Foster Electric soared 5.6 percent, while Softbank, a provider of Apple's iPhone in Japan, shed 0.6 percent.
Itochu
added 0.8 percent on saying it was in talks to buy U.S. fruit giant
Dole Food Co.'s packaged-food and Asian fruit and vegetable businesses,
reportedly for about $1.7 billion. Shipping lines Nippon Yusen and Mitsui O.S.K. jumped 4-7 percent, as the shares looked oversold amid recent concerns about a slowdown in the Chinese economy.
China's Shanghai Composite
index fell 0.8 percent on concerns the economic slowdown may deepen
after the official Xinhua News Agency said massive stimulus measures
would hurt the nation's long-term growth. Hong Kong's Hang Seng index
edged down 0.1 percent, snapping a five-day winning streak.
Australian
shares retreated in thin trading, dragged down by miners after the
recent recovery in iron ore prices stalled yesterday. Banks also fell across the board ahead of Fed decision on stimulus. ANZ slipped 0.3 percent, Commonwealth
slid 0.1 percent, NAB lost half a percent and Westpac declined 0.7
percent. Both the benchmark S&P/ASX 200 and the broader All
Ordinaries index fell about half a percent each.
BHP Billiton and Rio Tinto
reversed early gains to end down 0.2 percent and 0.1 percent,
respectively, after former treasurer Peter Costello defended the
Queensland government's decision to raise royalties on coal, saying the
government had little option but to increase taxes to cut the fiscal
deficit.
Shares of Fortescue Metals plunged almost 14
percent following reports that the miner had sought a 12-month waiver
from its lenders on all its debt covenants. Gold miner Newcrest edged
down 0.2 percent as it suspended production at its Cadia Valley
underground gold and copper mine in central western NSW due to an
equipment failure.
In economic news, inflation expectations among Australian consumers remained unchanged in September, and remain within the Reserve Bank of Australia's target band of 2-3 percent, a survey by Melbourne Institute showed.
Seoul
shares swung between gains and losses before ending on a flat note. The
Bank of Korea's unexpected move to hold its benchmark interest rates
steady had little impact on investor sentiment. The benchmark Kospi average rose 0.66 points or 0.03 percent to 1,951 in heavy-volume trading amid the expiration of option contracts.
Heavyweight Samsung Electronics
gained half a percent and LG Electronics closed up 2.5 percent as
Apple's launch of its latest iPhone 5 failed to offer major surprises.
Shares of LG Display and SK Hynix, Apple's component suppliers, retreated about 2 percent each.
New
Zealand shares fell from a four-year high as uncertainty surrounding
tonight's FOMC decision prompted investors to stay on the sidelines
after recent steep gains on expectations of central bank moves.
Domestically, Reserve Bank Governor Alan Bollard held the
official cash rate at 2.5 percent at his final review of monetary
policy, citing the weak outlook for the country's trading partners and a
high kiwi dollar which continues to undermine the export sector. The benchmark NX-50 index edged down 0.1 percent.
Insurer Tower
fell 2.7 percent after Chairman Bill Falconer, whose current term
expires in February, decided to step down now to enable a new chairman
implement changes from a strategic review. Gold miner OceanaGold led the declines on the exchange, tumbling 3.4 percent, while dual-lists banks ANZ
and Westpac fell less than a percent each. Fisher & Paykel
Appliances extended its recent gains, adding 1.3 percent, after Chinese
appliance maker Haier Group offered to buy the remaining stake that it
already doesn't own in the whiteware manufacturer.
Elsewhere, India's Sensex, Singapore's Straits Times and Indonesia's Jakarta Composite indexes were down marginally, while Malaysia's KLSE Composite rose 0.9 percent and the Taiwan Weighted average edged up 0.1 percent.
|
| Commodities |
| |
| USDCAD | USDEUR | USDGBP | USDJPY |
 |  |  |  |
| Please click on the images to view our interactive charts |
|
Crude Steady Above $97
The price of crude oil was moving higher Thursday morning as traders await cues from the two-day policy meeting by the U.S. Federal Reserve.
Light
Sweet Crude Oil (WTI) futures for October delivery, edged up $0.17 to
$97.18 a barrel. Yesterday, oil ended lower for the first time in six
days after the Energy Information Administration weekly oil report
showed an unexpected increase in inventories for the week ended
September 07. Investors also anxiously awaited cues from the Federal
Reserve meeting that got under way earlier today, with expectations high
on further quantitative easing measures forthcoming.
Wednesday
during trading hours, a report from the EIA revealed that U.S. crude oil
inventories unexpectedly moved up by 2.00 million barrels, while
gasoline stocks shed 1.20 million barrels in the weekended September 07.
Analysts were expecting crude oil inventories to shed by 2.90 million
barrels and gasoline stock to ease1.70 million barrels last week.
This morning, the U.S. dollar
was lingering around its four-month low versus the euro and sterling.
The buck was extending its seven-month low against the yen, while
ticking higher against the Swiss franc.
In economic news from the euro zone, the Swiss National Bank
decided to leave the minimum exchange rate unchanged at CHF 1.20 per
euro as expected by economists. The central bank also retained the
target range for the three-month Libor rate at 0.0-0.25 percent.
Traders
will look to the weekly jobless claims data from the U.S. Labor
Department, due out at 8.30 a.m ET. Economists expect claims to increase
to 370,000 from 365,000 in the previous week.
Separately, the
department is scheduled to release its report on the producer price
index for August. Economists expect the headline index for August to
have risen by 1.4 percent, while core consumer prices may have risen by a
more modest 0.2 percent. In July, producer prices and core producer
prices climbed by 0.3 percent and 0.4 percent, respectively.
|
|
|
No comments:
Post a Comment