Investors are anxiously awaiting the conclusion of the U.S.
Federal Reserve's policy meeting, hoping that the bank will provide
some clues about its future plans for its main interest rate.
Recent U.S. data has been overwhelmingly strong from stable
inflation figures, to an improving job market, to the most recent
consumer confidence data; which showed that U.S. shoppers were more
willing to spend their money.
Second quarter GDP data, due out later on Wednesday, is expected
to show that the U.S. economy grew by 3.2 percent, while Friday's
non-farm payrolls report is expected to confirm an improving labor
market. Most believe this spate of strong data will be enough for
the bank to increase interest rates sooner than expected.
In other news around the markets:
On Tuesday, the U.S. and the EU confirmed that they were
implementing further sanctions against Russia in response to the
nation's continued involvement in the ongoing Ukrainian conflict.
The new round of sanctions are more severe and target Russia's
banking, energy and defense sectors rather than individuals as past
sanctions have done. While announcing the new sanctions, President
Obama remarked that Russia will continue to face economic
consequences if it continues to support the Ukrainian rebels.
Although policymakers in Cairo are working tirelessly to negotiate
a cease fire agreement between Israel and Palestine, the fighting
on the Gaza strip continued on Wednesday morning with around 43
Palestinian's killed in the latest Israeli offensive. Reports of
the conflict's death toll say that more than 1,000 people have been
killed, most of them civilians. Although the Israeli military has
called for evacuations in whole neighborhoods before beginning a
military operation, many claim that Hamas has prevented evacuations
and put military bases and arms in places occupied by children.
Twitter proved that it wasn't old news just yet after its earnings
report showed that its monthly active user base had grown by 24
percent. Following the report, Twitter shares rose 35 percent on
Tuesday, as investors put more faith in the company's latest
product tweaks designed to add more new users and keep the
company's growth on track. On Tuesday, the National Labor Relations
Board decided that McDonald's may be viewed together with its
franchisees as a joint employer. The decision came after employees
complained that McDonald's franchises were violating their rights,
something that until now, was the fault of the franchise owners.
The decision is likely to affect restaurant companies around the
nation as it puts companies squarely at risk for how their
franchises are run.
Asian markets were mostly higher with the exception of the
Shanghai composite, which lost 0.09 percent. The NIKKEI was up 0.18
percent, the KOSPI gained 1 percent, the Shenzhen composite rose
0.17 percent and the Hang Seng index was up 0.10 percent.
Europe's markets were mostly lower with the exception of the
IBEX, which rose 0.29 percent. The FTSE was down 0.11 percent, the
STOXX 600 fell 0.18 percent, the CAC 40 was down 0.45 percent and
the MIB was down 0.19 percent.
Energy futures were mixed; Brent futures fell 0.06 percent and
WTI futures were up 0.23 percent. Gold fell 0.01 percent and silver
was up 0.20 percent, while industrial metals were mostly lower with
the exception of tin, which gained 1.10 percent. Copper lost 0.33
percent, aluminum was down 1.64 percent and zinc lost 1.83
Currency markets were quiet as investors waited for the Fed
decision. The euro was steady at $1.3403 and gained 0.01 percent
against both the pound and the yen. The dollar rose 0.06 percent
against the yen, 0.05 percent against the pound, and 0.10 percent
against the Australian dollar.
Notable earnings released on Tuesday included:
Express Scripts (NASDAQ:
) reported EPS of $1.23 on revenue of $25.11 billion, compared to
last year's EPS of $1.13 on revenue of $26.42 billion. United
Parcel Service (NYSE:
) reported EPS of $1.21 on revenue of $14.27 billion, compared to
last year's EPS of $1.13 on revenue of $13.51 billion.
) reported EPS of $0.58, compared to last year's EPS of $0.56 on
revenue of $12.97 billion. Aetna (NYSE:
) reported EPS of $1.69 on revenue of $14.51 billion, compared to
last year's EPS of $1.52 on revenue of $11.56 billion
Stocks moving in the Premarket included:
) was up 0.18 percent in premarket trade after falling 0.65 percent
on Tuesday. Transocean (NYSE:
) was down 0.39 percent in premarket trade after losing 5.15
percent over the past five days.
Notable earnings releases expected on Wednesday include:
Pilgrim's Pride (NYSE:
) is expected to report EPS of $0.64 on revenue of $2.21 billion,
compared to last year's EPS of $0.74 on revenue of $2.18 billion.
Kraft Foods (NASDAQ:
) is expected to report EPS of $0.82 on revenue of $4.85 billion,
compared to last year's EPS of $0.76 on revenue of $4.74 billion.
) is expected to report EPS of $2.24 on revenue of $18.24 billion,
compared to last year's EPS of $2.60 on revenue of $17.60 billion.
Phillips 66 (NYSE:
) is expected to report EPS of $1.75 on revenue of $47.47 billion,
compared to last year's EPS of $1.50 on revenue of $43.24 billion.
The U.S. will be in the spotlight on Wednesday with the Federal
Reserve's policy decision anxiously awaited. The U.S. is also due
to report second quarter GDP figures as well as oil inventory data.
Other notable economic releases will include German CPI, Spanish
GDP, French consumer confidence and British consumer
For a recap of Tuesday's market action, click .
Tune into Benzinga's #PreMarket Prep today to hear Phillip
Streible, Harlan Pyan and Dan Cook by clicking
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