Stocks inch higher before the Fed

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Stocks are higher again today as investors prepare for the Federal Reserve's monetary announcement this afternoon.

S&P 500 futures are up about 0.1 percent this morning, following a gain of 1.7 percent in the first two sessions of the week. Europe is also posting small gains, while Asian markets were modestly lower overnight.

Stocks have rebounded sharply after pulling back to key support from late 2013 and early 2014. They've been supported by ample cash on the sidelines, an improving economy, and a benign macro backdrop with low inflation and little political risk. The most recent threat to that order--turmoil in Crimea--passed into the rear-view mirror yesterday morning, and buyers jumped into stocks.

Attention now turns to the Fed at 2 p.m. ET. While economists expect the central bank to trim its bond purchases by $10 billion a month, it isn't clear what the market wants to hear beyond that. Hawkish language, for instance, might be viewed as a vote of confidence in the broader economy and spur bullish sentiment. Trade numbers also come out at 8:30 a.m. and crude-oil inventories follow two hours later.

optionMONSTER's proprietary researchLAB analysis tool shows strength across the broader market, but investors have recently favored companies tied to the burgeoning domestic-energy industry. Mortgage servicers, once-hot growth stocks that plunged early this year, have also been rebounding in recent weeks. In addition, semiconductors have started to perform and have seen increasingly bullish option activity.

In company-specific news, database leader Oracle and delivery giant FedEx are both down about 2 percent after earnings and revenue missed forecasts. SolarCity also inched lower on weak guidance. Adobe Systems beat expectations but hasn't traded yet this morning.

Other companies reporting quarterly results this morning include KB Home and General Mills. Cintas, Jabil Circuit, and ExOne follow after the closing bell.

Oil and metals are down fractionally, and European Brent crude, copper, and gold are off more than 0.5 percent. Agricultural products are also posting small losses.

Foreign-exchange trading is more bullish as the Japanese yen weakens across the board. 



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

Copyright © 2010 OptionMonster® Holdings, Inc. All Rights Reserved.


This article appears in: Investing , Options

Referenced Stocks: SPX

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