US pre-open: Stocks seen a little higher as investors eye rate hike
Updated : 11:38
US futures pointed to a slightly higher open on Wall Street as investors eyed the first day of the Federal Reserve’s two-day policy meeting amid expectations of a 25 basis points rate hike.
At 1040 GMT, Dow Jones Industrial Average, Nasdaq and S&P 500 futures were 0.3% firmer.
Jamieson Blake, retail sales manager at ADS Securities in London, said: “Wall Street is eyeing yet more all-time highs at the open with futures currently indicating that the Dow will start at dizzyingly high levels, less than 200 points short of the psychologically significant 20,000 mark.
“Questions abound as to the sustainability of this move, with tomorrow’s FOMC potentially holding the biggest clues here, but for now the grind higher seems to be happy to go largely unchecked. Critically however if we see Janet Yellen raising concerns about inflationary pressures next year and this pointing to a flurry of rate hikes in addition to tomorrow’s priced-in move, then it may be time for a rethink. As it stands right now, the valuations appear to be reflecting more of a ‘one and done’ mindset from the Fed.”
Meanwhile, oil prices were higher as the International Energy Agency said in its monthly report that the agreement by OPEC to cut production by 1.2m barrels a day and by non-OPEC nations to cut by 558,000 barrels should help balance supply and demand by the first half of 2017.
The IEA said OPEC countries produced 34.2m barrels a day last month, up 300,000 from October, adding that the said the next few weeks were crucial for markets following the OPEC deal.
West Texas Intermediate was up 0.5% to $55.95 a barrel and Brent crude was 0.2% higher at $52.96. Prices had surged to mid-2015 highs following an agreement between OPEC and non-OPEC members to cut production at the weekend.
In corporate news, data analytics company Inovalon Holdings tanked in pre-market trade after it downgraded its annual guidance late on Monday.
Elsewhere, tech giant Apple was likely to be in focus after the Wall Street Journal said the company was looking to invest in a $100bn fund being raised by Japan’s SoftBank Group.