Tuesday September 20th

20-09-2016

Wall Street seen higher amid Fed meeting and housing starts; oil lower

U.S. stock index futures gained on Tuesday as traders awaited the start of the U.S. Federal Reserve's two-day meeting. The central bank will make a policy announcement on Wednesday at the end of the meeting. Market consensus is for the Fed to hold its base rate in the 0.25-0.50 percent range and not lift again until December. The Bank of Japan will also meet on Tuesday and make an announcement on Wednesday. There is speculation the Japanese central bank could cut interest rates further into negative territory. On Tuesday, attention will be on U.S. housing starts and building permits data for August — which showed a drop — as well as oil prices. U.S. stocks on Monday gave up gains when crude turned lower. U.S. equities closed mostly flat on Monday after a choppy session.Light crude futures for October traded 37 cents lower on Tuesday at $42.93 per barrel. Companies expected to report earnings on Tuesday include FedEx, Adobe and KB Home. Lennar posted better-than-expected quarterly results. Another stock to watch will be Chesapeake Energy, after S&P Global Ratings downgraded its credit rating to "selective default" from "CC." The stock traded more than 5 percent lower in extended hours trade. Shares of Frankfurt-listed Bayer were higher on Tuesday as the company forecast higher revenue and earnings in forthcoming years after announcing a planned $66 billion takeover of Monsanto. Asia markets were mixed on Tuesday, with traders likely taking to the sidelines to await Wednesday's closely watched monetary policy decisions due in the U.S. and Japan. Stocks in Japan ended mixed, after the market was closed on Monday for a public holiday. The main Nikkei 225 index closed down 27.14 points, or 0.16 percent, at 16,492.15. The Topix index closed up 5.47 points, or 0.42 percent, at 1,316.97. Across the Korean Strait, the Kospi climbed 9.93 points, or 0.49 percent, to 2,025.71. In Hong Kong, the Hang Seng index was nearly flat at 23,543.36. Chinese mainland markets also closed nearly flat, with the Shanghai composite at 3,023.30, while the Shenzhen composite was at 2,000.06. Gold rose for a second straight session on Tuesday as the dollar dropped ahead of a two-day U.S. Federal Reserve meeting that investors are betting will leave interest rates unchanged. Spot gold was up 0.1 percent at $1,315.41 an ounce, with U.S. gold futures holding flat at $1,319.