US pre-open: Stocks seen slightly higher ahead of earnings, data deluge

US futures pointed to a slightly higher open on Wall Street as the Federal Reserve’s two-day policy meeting kicks off and ahead of a slew of earnings and data releases.

At 1056 BST, Dow Jones Industrial Average, S&P 500 and Nasdaq futures were all 0.2% firmer.

Meanwhile, stocks in Europe were in the black as investors there sifted through a deluge of corporate news.

Oil prices were higher, underpinned by a weaker dollar. West Texas Intermediate was up 0.6% to $42.93 a barrel and Brent crude was 0.7% higher at $44.79.

Although the Fed is widely expected to stand pat on interest rates on Wednesday, market participants will be scrutinising the accompanying statement for any clues on future policy.

Bank of America Merrill Lynch reckons the Fed will likely hike rates again this summer, potentially in June if the global market selloff ahead of the Brexit vote in the UK is limited. Otherwise, it still sees a good case for the next hike in July.

“Either way, we believe the Fed will have to start preparing the markets for a possible rate hike at an upcoming meeting this summer. With no press conference or forecast update at the April Federal Open Market Committee (FOMC) meeting, focus will be on the statement language.

“The FOMC will likely acknowledge the weak data to start the year, but contrast with expectations for continued gradual progress toward full employment and the inflation target. The Committee may note global risks have dissipated slightly, or that the disinflationary effects of the US dollar or commodity prices have started to ease. Some signal of this type could help to modestly lift the market’s assessment of rate hike likelihood. More explicit language or guidance would be more powerful, but also a low-probability outcome.”

On the corporate front, investors were eyeing results from 3M, Procter & Gamble and DuPont ahead of the open. Numbers are also due from Hershey, Coach and Reynolds American, while Apple, Twitter, AT&T, and Ebay were due to release their quarterly results after the closing bell.

On the macroeconomic calendar, US durable goods orders are at 1330 BST, S&P/Case-Shiller house prices are at 1400 BST, the Markit Services PMI is at 1445 BST and consumer confidence is at 1500 BST.