Market News The U.S. stock market ended the Tuesday session on a modestly higher note with participants gearing up for the latest policy directive from the FOMC, which will be released on today afternoon. Top-weighted components like Bank of America (BAC 15.59, +0.31) and Morgan Stanley (MS 32.50, +0.79) posted respective gains of 2.0% and 2.5%, while the entire sector extended its June advance to 1.9%. The Fed will conclude a two-day policy meeting on Wednesday, and the U.S. central bank is seen scaling back its asset-purchasing program by another $10 billion, though hikes to benchmark interest rates wont come until sometime in 2015. Traders who bet on the future path of the fed funds rate expect the first hike to occur around mid-2015, with a slow path higher from there, according to CME FedWatch. Currency investors are also likely to pay attention to a change in tone. If the Fed gives a nod to higher inflation, it may add to speculation that interest-rate hikes could come sooner than expected. If that pushes up U.S. interest rates, it would boost the appeal of U.S. assets, likely leading to a stronger dollar. Today, the weekly MBA Mortgage Index will be released at 12:00 GMT, while Q1 Current Account Balance will cross the wires at 13:30 GMT. Lastly, the FOMC will release its latest policy directive at 19:00 GMT. S&P 500 +5.1% Nasdaq Composite +3.9% Dow Jones Industrial Average +1.4% The yellow metal slipped 0.3% to $1271.80/ozt, but still ended above its pre-CPI levels. Gold traded at $1265 ahead of the report and fell to $1260 immediately after, before spending the remainder of the day in a slow climb. The nearest level of support for gold futures is around $1,240 while the resistance is near $1,280. Silver for July delivery rose 0.03% at $19.737 a troy ounce. Copper futures for July delivery gained 0.04% at $3.061 a pound. Michael Lombardi of the Profit Confidential blog says he believes both gold and silver are poised to rally in the face of the current economic prospects. “Today’s depressed precious metal prices continue to offer investors a real opportunity to get into gold and silver (two great inflation hedges) at discounted prices,” he wrote. “Both these metals should rise in value over the next five years as inflation accelerates.” Asian stocks outside Japan fell as energy shares dropped ahead of a Federal Reserve monetary policy decision today. The Nikkei 225 gained for a second straight day, up 0.4%, amid yen weakness. The dollar rose slightly against the yen to close out the Tuesday session at ¥102.15. Crude oil prices gained on Wednesday in Asia after industry data showed a sharp drop in U.S. crude oil stocks. Crude Oil for delivery in August traded at $106.03 a barrel, up 0.15%.
Posted on: Wed, 18 Jun 2014 14:41:39 +0000
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