Dow Jones Industrial Average Futures Lower Ahead of Fed Decision

There May Still Be Time to Ride the S&P Rally

Dec 14, 2016 at 9:13 AM
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Dow Jones Industrial Average (DJIA) futures are cautiously lower ahead of the bell, as traders wait for the conclusion of the Federal Open Market Committee (FOMC) meeting, where the Fed is expected to hike interest rates for the first time in a year. Stock traders will also digest a post-meeting speech from Fed Chair Janet Yellen. In the meantime, investors are weighing today's economic data, with U.S. retail sales rising by just 0.1% in November, missing estimates for a 0.3% increase. Meanwhile, the producer price index (PPI) rose by 0.4% last month, beating analyst expectations for a 0.2% jump. 

Continue reading for more on today's market, including: 

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Futures on the Dow Jones Industrial Average (DJIA) are about 20 points below fair value.

5 Things You Need to Know Today
  
  1. The Chicago Board Options Exchange (CBOE) saw 898,833 call contracts traded on Tuesday, compared to 486,168 put contracts. The resultant single-session equity put/call ratio fell to 0.54, while the 21-day moving average remained at 0.59.
  2. Amazon.com, Inc. (NASDAQ:AMZN) is set to pop 0.3% at the open, after its Amazon Prime video service launched today in several countries, and now streams video in more nations than rival Netflix, Inc. (NASDAQ:NFLX). While the stock still remains slightly below its pre-election bear gap, AMZN shares have recovered more than half of their post-election losses.
  3. Valeant Pharmaceuticals Intl Inc (NYSE:VRX) is set to open 0.8% higher, even after activist investor Bill Ackman's Pershing Square sold more than 3.4 million shares of the drama-ridden biotech, in hopes of generating a tax loss for its investors. Pershing Square now owns 7.8% of VRX, down from 9% before the sale.
  4. General Motors Company (NYSE:GM) is down 3.5% in electronic trading, amid reports that China will penalize an unnamed U.S. automaker for "monopolistic behavior." In addition, GM asked the U.S. Supreme Court to overturn its previous ruling allowing lawsuits over GM's faulty ignition switches in spite of the auto company's bankruptcy filing. 
  5. Industrial production data, business inventories, and the regularly scheduled crude inventories report are slated for release. The highlight of the day will be the conclusion of the FOMC December meeting and Yellen's subsequent press conference. Stepping up to the earnings plate are Joy Global (JOY) and Pier 1 Imports (PIR).

Buzz Stocks Dec 14

Overseas Trading

Traders in Asia tread cautiously ahead of the Fed's upcoming interest rate decision, leading to a mixed finish. China's Shanghai Composite made the sharpest move of the bunch, falling 0.5%. Elsewhere, Hong Kong's Hang Seng, South Korea's Kospi, and Japan's Nikkei each finished a hair above breakeven. Drilling deeper, stocks in Japan reacted to the Bank of Japan's Tankan survey, which revealed sentiment among manufacturers hit an annual high in the fourth quarter, bolstered by a weaker yen and a strong stock market.

Anticipation surrounding the FOMC's interest rate decision has European bourses lower -- paced by healthcare stocks, following news that Johnson & Johnson (NYSE:JNJ) will no longer pursue Swiss drugmaker Actelion. Meanwhile, U.K. unemployment held at an 11-year low during the third quarter, but economists warned of signs that the labor market is beginning to "cool off" post-Brexit. As such, London's FTSE 100 is roughly 0.1% lower. Things are worse off for the French CAC 40 and German DAX, down 0.4% and 0.2%, respectively.

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