Positive tone to markets so far
After a poor start and better finish yesterday, Wednesday is shaping up well thanks to positive signs from east and west. After the first day of the Fed’s monetary policy meeting the hope is that interest rates will be held in accordance with previous announcements; late next year rather than sooner. There is good news from China too with the central bank making US$81 billion in loans available to the country’s biggest banks. That fresh stimulus has seen most Asian markets end higher although Tokyo closed with losses. Europe’s markets are all trading higher with confidence in the US and Asian economies growing and an underlying feeling that Scotland may in the end vote to stay in the UK. US futures on the S&P and Dow are trending up while the Nasdaq is edging lower. The dollar remains strong. Oil is still trending lower.
The Fed will release economic forecasts and interest rate policy at 2pm ET with chair Janet Yellen holding a press conference at 2.30pm ET.
Consumer price data is released at 8.30am ET.
Earnings reports before the bell include General Mills and FedEx with Pier 1 Imports posting after markets close.
Sony makes historic dividend announcement
Sony was first listed on the stock exchange in 1958 and has paid a dividend every year since. This year becomes a historic one for the company but not for good news; it will not be paying a dividend this year. The announcement came as Chief Executive Kazuo Hirai revealed a deeper than expected loss estimate due to its struggling smartphone business. Hirai told the press gathering that he is now revising the firm’s mobile strategy but that the division will remain as one of its core businesses.
Alibaba IPO may be too risky for many
The forthcoming IPO of Chinese e-commerce giant Alibaba may see great returns for investors; but ‘may’ is the keyword. Many analysts are advising caution and not to allow the tag of ‘China’s Amazon’ to cloud judgement. Currently Chinese investors are scrambling for the shares with other investments suffering; the Hong Kong markets are seeing withdrawals as investors free up cash for the Alibaba offer. Shares in Yahoo and Softbank Corp are also flourishing as both were early backers of the company.