Wednesday October 28th

28-10-2015

All eyes on Fed; Apple gives Wall Street a boost

U.S. stock index futures pointed to a higher open on Wednesday ahead of a statement from the Federal Reserve this afternoon and more earnings, after Apple posted results after the bell on Tuesday that topped expectations. Fed officials may hope to keep the door open for a December rate hike, but the slower economy could make them sound more dovish and unlikely to take action this year. The Fed winds down its two-day meeting Wednesday with a statement at 2 p.m. ET, and the central bank is not expected to increase interest rates or take other action. The Fed surprised Wall Street when it held off on a rate hike in September, but since then the economic data has softened and the global headwinds the Fed pointed to in its September statement remain. The U.S. advance September goods trade deficit was $58.63 billion. Key earnings before the bell included Starwood Hotels, Generac and Anthem. Amgen, Paypal, Samsung Electronics, F5 Networks, GoPro, Marriott, Vertex Pharma, Western Digital, Buffalo Wild Wings, Imax, Invensense and Yelp are due after the bell. Apple posted quarterly earnings and revenue that topped analysts' expectations, boosted by strong iPhone growth in China on Tuesday. The group reported fiscal fourth-quarter earnings of $1.96 per share on sales of $51.5 billion. Analysts expected the tech giant to report earnings of $1.88 per share on $51.11 billion in revenue, according to a consensus estimate from Thomson Reuters. Shares were up about 1.5 percent in premarket trading on Wednesday. European markets traded higher on Wednesday as investors look ahead to the conclusions of the Fed's policy meeting. Scandal-hit carmaker Volkswagen reported an operating loss of 3.48 billion euros for the third quarter and said it expects its 2015 operating profit for both the group and the passenger cars business to be down significantly year-on-year. Asian markets traded mostly lower Wednesday, with losses in energy plays amid fresh oil-price declines counterbalanced by gains in Japan shares as traders hoped for more stimulus from the central bank. Japan shares ended higher, with the Nikkei index tacking on 0.67 percent. Oil prices edged higher on Wednesday after a report showed inventories fell at a key U.S. delivery hub last week, but without further evidence of more aggressive output cuts, gains were expected to be temporary. Investors are awaiting official inventory data due out later on Wednesday that is expected to show further stockpiling at a time when the world's largest oil exporters are pumping at record rates to retain market share. Brent December crude futures were up 41 cents at $47.22 a barrel at 7:50 a.m. EDT (1150 GMT), having fallen to their lowest since mid-September on Tuesday and unwinding the rally that took the price to a peak of $54 earlier this month. U.S. crude for December delivery rose 33 cents to $43.53 a barrel, up from Tuesday's nine-week low of $42.58. Gold rose back above $1,170 an ounce on Wednesday on caution ahead of the Federal Reserve's latest policy statement, though gains were capped by uncertainty over the timing of an expected U.S. interest rate rise. The metal edged back above its 200-day moving average at $1,172 an ounce, a key chart level that it breached earlier this month for the first time since May. Spot gold was up 0.6 percent at $1,174.16 an ounce, while U.S. gold futures for December delivery were up $8.90 an ounce at $1,174.70.