Stocks climb ahead of Fed decision
Stocks in the US got off to a soft note, as investors are poised to wait until the decision on interest rates by the Federal Reserve which is scheduled to be released at 1800 GMT on Wednesday. The S&P 500 index climbed above 1,700 and is poised to test an all-time high. The Fed is expected to taper its bond purchase program which currently stands at 85 billion a month in treasury and agency bonds. Expectations amongst analysts are that the FOMC will reduce purchases by 10-15 billion dollars per month. The mix of treasuries and agencies that will be tapered is 50-50.
Data released in the US during the past two weeks has been mixed. Though PMI data has been strong, employment and retail sales data were softer than expected. Inflation data continues to remain in check with both PPI and CPI coming in near expectations.
In corporate news, General Motors (NYSE:GM) stated that it is working on an electric vehicle that can travel 200 miles on a single charge. The car maker is planning on pricing the car, which is still in the early phases of development, at about $30,000 to challenge Tesla, which sells a more expensive model. Also, Microsoft announced a 2% increase in its dividend, and a 40 billion dollar stock buyback.
In US economic data, the consumer price index came out at 0.1% in August compared to the 0.2% in July. The core CPI, which excludes food and energy, also came out at 0.1% August in line with expectations. Inflation expectations remain tame and could keep the Federal Reserve on the sidelines. In August, CPI was up 1.5% from a year earlier, slower than the 2% pace in July. Core prices were up 1.8% in August, rising one-tenth of a percentage point from the previous month to its highest rate since March. In other economic news, the NAHB/Wells Fargo Housing Market Index printed at 58. That matched the reading in August, which was revised downward to 58 from an original reading of 59.
Sorry. No data so far.