Breaking News
0

Top 5 Things to Know in the Market on Wednesday

EconomySep 18, 2019 09:52AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters.

Investing.com -- It's Fed day, in more than just the usual way. The central bank is also due to carry out some fine-tuning of a money-market that has gone haywire in the last couple of days due to a complex interplay of short- and long-term factors. And oil prices are settling back at lower levels after Saudi Arabia promised the world that it would be back to normal by the end of the month. Here's what you need to know in financial markets on Wednesday, 18th September.

1. Fed to join the global easing party?

The Federal Reserve is still – just about – expected to cut interest rates by 25 basis points at its regular policy meeting which concludes later. As always, the policy statement will come at 2 PM ET, with Chairman Jerome Powell’s press conference following at 2.30 PM.

Expectations of a cut have faded in recent days after some strong U.S. data but the majority of market participants still expect action. According to Investing.com’s Fed rate monitor tool, the implied chance of a cut has fallen to barely 55% from nearly 100% as recently as the start of last week.

The Fed isn’t the only central bank meeting. Brazil’s central bank will also make its monetary policy announcement later in the day. Central banks from Frankfurt to India, Russia, China and Turkey have all dramatically loosened monetary policy in recent weeks to counter a global slowdown.

2. Feathers fly in the money market

The Fed’s rate decision is likely to be overshadowed by some extraordinary turbulence in the short-term money market over the last couple of days, which has seen overnight rates spike far higher than the targeted range of 2% to 2.25%.

Analysts blame a combination of short-term and structural factors for the volatility: demand for cash as spiked as companies prepare to meet their quarterly tax bills (the deadline for which was Sept. 15), while a freshly-settled auction of Treasuries has left the market short of cash at the same time.

However, some point to the fact that regulation introduced after the financial crisis has made it harder for banks to manage such liquidity risks, and made it harder for the Fed to judge the level of overall liquidity needed by the financial system.

The Fed is carrying out a second day of overnight “repos” today, to help bring short-term rates back to the target range.

3. Stocks set to open lower

U.S. stock indexes will be in holding mode until the Fed’s decision but look set to open a touch lower in the meantime.

By 6 AM ET, Dow futures were down 27 points or 0.1%, while S&P 500 futures were also down 0.1% and Nasdaq 100 futures were down 0.2%.

The two traditional indices are still within touching distance of new all-time highs, although the appetite for making new records may have weakened overnight after FedEx (NYSE:FDX) reported a drop in profit in its fiscal first quarter and said full-year earnings would fall much more steeply than initially forecast. It blamed its rift with Amazon (NASDAQ:AMZN) and the global economic slowdown. Adobe (NASDAQ:ADBE) shares also fell in after-hours trading after the software company issued weak guidance for the year.

4. Oil retreats as Saudi says there'll be nothing to see here by month-end

Oil prices have stabilized at lower levels overnight after Saudi Arabia said it will restore lost production by the end of September. Energy Minister Prince Abdulaziz bin Salman also said it has managed to restore supplies to customers to the levels they were at before the weekend attacks on its facilities by drawing from its inventories.

By 6 AM ET, WTI futures, the U.S. crude benchmark, were at $58.59 a barrel, down 0.9% from late Tuesday and down over $4 from the peak that they hit in the immediate aftermath of the attacks. The international benchmark Brent was down 0.9% at $63.98 a barrel.

While the supply situation in the Gulf will hog the limelight for the near future, U.S. government data on crude stocks are also due today, at 10:30 AM ET. The American Petroleum Institute’s figures released on Tuesday suggested a surprise 592,000 barrel increase in inventories. The market is expecting a net drawdown of 2.5 million barrels.

5. Housing market update

Away from the Fed, there will also be updates on the housing market in the form of building permit and housing starts data at 8:30 AM ET.

They come hot on the heels of another rise in the NAHB housing market index to its highest since October last year, a development helped by the recent drop in bond yields that has dragged down refinancing rates.

Top 5 Things to Know in the Market on Wednesday
 

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments
Kenny Venezia
Kenny Venezia Sep 18, 2019 9:56AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
of course they're going to cut the rates all Ponzi schemes Lee constant funding otherwise they collapse decrease
nick bryson
nick bryson Sep 18, 2019 9:47AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
they will cut rates by 25 points just to keep the market stagnant. plus they are buying up bad assets to the tune of $70billion a month going forward. they aren't preventing the recession so much as they are going to drag it out. last time it took a year for the markets to finally hit bottom. expect a repeat
Ivan Couto Jr
Ivan Couto Jr Sep 18, 2019 7:13AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
I may be blind or missing something. Fed already cut once. I do not see any meltup in NAHB. It is flat, ready to fall in fact.
Robert Barnes
Robert Barnes Sep 18, 2019 7:13AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
from what I just read on their chart they have been above projected numbers the last few months
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email