Stocks are inching higher this morning as investors await the
Federal Reserve's monetary announcement this afternoon.
S&P 500 futures are up more than 0.1 percent but have weakened
in the last two hours. European markets are rallying by more than
0.5 percent. Asia was mostly higher in the overnight session, led
by a 2 percent gain in Tokyo as the Japanese yen weakened and
investors anticipated news of further economic reforms. India's
Sensex also rallied more than 1 percent after the country's central
bank refrained from hiking interest rates.
The S&P 500 has been holding its ground after a pullback last
week, though price action has been increasingly bullish as
investors favor cyclical areas like small caps and industrials. Our
market scanner also shows emerging strength in semiconductor and
computer-hardware names in the last week.
The Fed's announcement comes at 2 p.m. ET, and attention will focus
on when the central bank will reduce monetary stimulus. While few
economists anticipate a reduction today, a
published yesterday shows their expectations moving closer in the
last two months. While on the surface bearish, such a step has been
thoroughly discussed since the spring and would result from a
strong economy rather than rising inflation. So it's not clear how
investors would react.
Other items on today's calendar including housing starts at 8:30
a.m. ET and crude-oil inventories at 10:30 a.m. ET. The Mortgage
Bankers Association already reported that home-loan applications
fell to their lowest level in more than 12 years, hurt by about
interest rates before the Fed's announcement.
In company-specific news, FedEx and General Mills are down about 2
percent on weak quarterly reports. Lennar rose 3 percent after the
homebuilder's results beat expectations and orders continued to
increase. Jabil Circuit is cratering 17 percent after guidance
trailed estimates by a wide margin.
Commodities are little-changed. Oil is flat, precious metals are
slightly higher, copper fell half a percent, and agricultural
products are mixed. The weak yen is the main story in
foreign-exchange markets, with few other currencies making big