Stocks are set to rise this morning as the Fed heads into what could be a historic meeting and the Senate struggles to pass a bipartisan budget act.
After Friday’s mixed session, Dow
(INDEXDJX:.DJI) futures were up 0.13% at 15,844.00 before the opening bell on Monday. After suffering its biggest weekly decline in almost four months last week, S&P 500
(INDEXSP:.INX) futures rose 0.06% to 1,781.40. Nasdaq
(INDEXNASDAQ:.IXIC) futures climbed 0.08% to 3,472.75.
The bipartisan Ryan-Murray budget deal that passed through the House of Representatives so easily is having trouble gaining Republican support. Several high-profile Republicans have come out against the deal, which would retract some of the sequester cuts from earlier this year. Some reports say that the move will have enough Republican votes to survive a procedural test vote, assuming all 55 Democrats vote for it.
Today, the Federal Reserve begins its two-day policy meeting where many economists expect it to incrementally reduce the level of its monthly asset purchases. A budget deal in Congress and steadily improving employment data could tilt the voting members of the Federal Open Market Committee toward scaling back stimulus. Today, the government reported that inflation is still very tame, which could support the case for continuing quantitative easing. Consumer prices were flat in November, and excluding food and energy, prices only rose 0.2%. The results of the Fed meeting will be released tomorrow at 2 p.m.
In companies news, shares of The Boeing Company
(NYSE:BA) rose 2.25% today as the aerospace company announced yesterday that it will buy back $10 billion in shares and raise its quarterly dividend to $0.73 from $0.485 per share.
(NASDAQ:FB) will launch video advertisements starting today, giving the option for advertisers to put video ads into users’ newsfeeds starting on Thursday. Investors appear to favor the move, as the social network’s stock advanced more than 2% on the news. The Wall Street Journal reports
that users might gripe about ads automatically playing, but the sound will be off by default.
Auto makers also advanced today on a European Automobile Manufacturers Association report that registrations in Europe rose for the third straight month in November. EU car registrations rose 1.2% to 938,021 vehicles. General Motors
(NYSE:GM) advanced more than 1% on the news.
European stocks are down today despite a far better than expected result from Germany’s ZEW Survey. German financial experts’ rating of current conditions rose to 32.4 points from 28.7 in November. Business expectations also unexpectedly jumped to a seven-year high of 62 from 54.6.
Deflation is still a problem, however. It was reported today that eurozone consumer prices fell 0.1% on a monthly basis in December. Prices fell 0.9% year-over-year.
Japanese stocks were slightly higher today as the government announced plans to increase defense spending to counter China’s assertions over Japanese and Korean seas. Over the next five years, Japan will increase military spending by 2.6%.
No positions in stocks mentioned.
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