US open: Stocks higher ahead of Fed rate decision

By Iain Gilbert

Date: Wednesday 16 Sep 2020

US open: Stocks higher ahead of Fed rate decision

(Sharecast News) - Wall Street stocks opened higher on Wednesday ahead of the Federal Open Market Committee's latest policy meeting.
As of 1520 BST, the Dow Jones Industrial Average was up 0.48% at 28,128.72, while the S&P 500 was 0.31% firmer at 3,411.81 and the Nasdaq Composite came out the gate 0.07% stronger at 11,198.15.

The Dow opened 133.12 points higher on Wednesday, extending the previous session's minute gains following Apple's first virtual-only product reveal.

Wednesday's main focus will undoubtedly be the Federal Open Market Committee's meeting, its first since agreeing to target average inflation. The Federal Reserves' interest rate decision will be announced at 1900 BST, as will the FOMC's economic projections, while a press conference will follow at 1930 BST.

Market participants expect the central bank to maintain its downbeat stance on the US economy but were also hoping for the Fed to provide greater clarity on what it would take to raise interest rates in the future.

On the macro front, mortgage applications dropped 2.5% in the week ended 11 September as ongoing economic uncertainty managed to offset low interest rates and all but reverse the prior week's 2.9% increase. The Mortgage Bankers Association also said applications to refinance a home loan dropped 3.7% and homebuyer mortgage applications declined 0.5%.

Still on the housing market, single-family homebuilder confidence grew to an all-time high in September, with historically low mortgage rates continuing to boost the market as the National Association of Housebuilders/Wells Fargo housing market index rose five points to a record high of 83.

Elsewhere, US retail sales volumes grew more slowly than anticipated last month, weighed down by slower growth in consumer spend for autos and at gasoline stations.

According to the Department of Commerce, in seasonally adjusted terms, retail sales grew at a 0.6% month-on-month clip in August (consensus: 1.0%) to reach $537.53bn. Commerce also revised down its preliminary estimate for July, from an increase of 1.2% to 0.9%.

Lastly, business inventories increased 0.1% in July - bang in line with expectations and a marked turnaround from the 1.1% decline recorded in June.

In the corporate space, stronger-than-anticipated earnings from both FedEx and Adobe after the close helped boost sentiment.

Shares in data storage firm Snowflake opened for trading on Wednesday, with the group pricing its shares at $120 per share.


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