USA stocks trade mixed as investors await Fed's rate decision

Fed Chairman Jerome Powell, who Trump has complained loudly and publicly about, will have a news conference Wednesday that Wall Street will closely monitor for any signs of a coming rate cut. The Dow is 1.4% below its record high set October 3. Futures on the S&P and Nasdaq were also up.

Having slid since the June 6 European Central Bank meeting to nearly half the ECB's medium-term target, a key long-term market inflation gauge - the five-year, five-year breakeven forward rate - posted its biggest ever one-day jump after Draghi spoke on Tuesday.

"If the Fed is easing, it certainly means that they expect (that) the USA economy.is slowing".

In a paper released this week, Brad Setser, a former U.S. Treasury official now at the Council on Foreign Relations, argued that "countering currency intervention by foreign governments should be a top priority of U.S. global economic policy".

Engineering company Parsons will report its latest results before the bell.

In other economic news, the ZEW institute's economic confidence index for Germany slumped by a "sharp" 19.0 points from the month before to reach -21.1 points in June.

Also dampening the mood was news that Washington would deploy a further 1,000 troops to the Middle East.

Markets have been fired up by European Central Bank president Mario Draghi's Tuesday volte-face on policy easing. Monetary instruments include interest rate cuts and buy-back programs. That was faster than an increase of 0.62 percent in April and a lift of 0.61 percent in March.

MSCI's global equity index rose 0.4pc, adding to Tuesday's 1pc gain, as Asian shares excluding Japan followed the lead of their European and United States counterparts to jump nearly 2pc - their biggest one-day rally since January.

Investors will now turn attention to U.S. -China trade dispute, which could lead to more tariffs and less trade. The U.S. West Texas Intermediate (WTI) crude futures lost 0.5 percent at $51.65. "For markets, the debate now is not about whether there will be stimulus but what kind of stimulus we will get".

"I think it's right in line with market expectations, puts a July cut in play", said Brett Ewing, chief market strategist at First Franklin Financial Services in Tallahassee, Florida.

Quoting statistics, following ECB Chair's speech at Sintra, the regional Pan-European STOXX 600 had snowballed by 1.8 percent after falling as much as 0.5 percent at the morning European trading hours.

Elsewhere, the European Automobile Manufacturers' Association reported that auto sales in the European Union edged higher by just 0.04% against their year ago level in May to reach 1.44m vehicles.

"The overall sentiment in the gold markets is positive".

Should global economic conditions deteriorate further and feature more prominently in the EU's economic data, that may drastically lower the bar for an European Central Bank rate cut.

  • Zachary Reyes


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