Wednesday October 30th

30-10-2019

Stocks set for slight gains at the open after better-than-expected economic growth, jobs data

U.S. stock index futures pointed to slight gains on Wednesday as market participants digested stronger-than-forecast economic data while they waited for the Federal Reserve’s decision on interest rates. Around 8:30 a.m. ET, Dow Jones Industrial Average futures indicated a gain of 33 points at the open. S&P 500 and Nasdaq 100 futures also indicated slight gains to start off Wednesday’s session. The Commerce Department said U.S. GDP grew by 1.9% in the third quarter, topping expected growth of 1.6%. U.S. private payrolls increased by 125,000 in October, according to ADP and Moody’s Analytics. That topped a Dow Jones estimate of 100,000. However, September payrolls were trimmed down by 42,000 to 93,000. The U.S. economic data came ahead of the a major monetary policy announcement from the Fed. The Fed is largely expected to cut announce a 25 basis-point rate cut at 2 p.m. ET. That would be the central bank’s third rate cut of 2019. But investors will look for clues about the Fed’s moves after this meeting. Market expectations for another interest rate cut in December are at 23%, according to CME Group’s FedWatch tool, compared with almost 70% earlier this month. The corporate earnings season also continued Wednesday with General Electric posting results that topped analyst expectations. GE also raised its forecast for 2019 cash flow, sending its stock up 7.5% in the premarket. CME Group and ADP also reported better-than-expected earnings. Apple, Facebook, Starbucks and Lyft are among the companies set to release their results after the bell. So far, the corporate earnings season has been better than feared. Of the S&P 500 companies that have reported, 74% have posted better-than-expected earnings, according to FactSet data. Wednesday’s moves came after the S&P 500 touched an all-time high in the previous session. However, the broad index failed to close higher on Tuesday amid mixed quarterly results and trade news. Reuters reported Tuesday, citing an unnamed U.S. administration official as saying an interim trade agreement between the U.S. and China might not be completed in time for signing in Chile next month. The news outlet also said Wednesday the Trump administration’s demand that Beijing commit to buying more U.S. agricultural products has become a major sticking point in negotiations. Washington and Beijing secured a limited trade deal earlier this month, in an attempt to end a protracted dispute that has battered financial markets and hammered global growth. Stocks in Asia fell on Wednesday ahead of the U.S. Federal Reserve’s interest rate decision, set to be announced later stateside. The Nikkei 225 in Japan slipped 0.57% to close at 22,843.12 while the Topix index finished its trading day 0.19% higher at 1,665.90. South Korea’s Kospi closed 0.59% lower at 2,080.27. Mainland Chinese shares finished their trading day lower, with the Shanghai composite slipping 0.5% to around 2,939.32 and the Shenzhen component shedding 0.66% to 9,681.54. The Shenzhen composite also fell 0.856% to approximately 1,628.62. Hong Kong’s Hang Seng index shed 0.48%, as of its final hour of trading. Oil prices fell on Wednesday as a possible delay in resolving the U.S.-China trade war overshadowed a drop in U.S. crude inventories. Brent crude was down 3 cents, at $61.57 a barrel, having fallen to as low as $61.32. U.S. West Texas Intermediate (WTI) crude was down 15 cents, or 0.3%, at $55.39 a barrel after reaching a low of $55.16. Gold prices edged higher on Wednesday having touched a one-week low in the previous session, as investors awaited a decision by the U.S. Federal Reserve on a widely anticipated rate cut. Spot gold was up 0.2% at $1,490.23 an ounce. U.S. gold futures edged 0.2% higher to $1,493.20.