Stock Groups

Stock futures are flat ahead of the Fed decision

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Traders working at the New York Stock Exchange (NYSE) Floor, October 12, 2021

Brendan McDermid | Reuters

 

U.S. stock futures declined little Tuesday night while investors waited for a Federal Reserve decision on the tapering schedule.

Dow Jones Industrial Average futures dropped 18 points or 0.05%. S&P 500 and Nasdaq 100 futures dipped 0.05% and 0.06%, respectively.

Lyft’s after-hours trading rose 10.3% on stronger-than-expected third quarter results. Zillow dropped 8% following its announcement that it would be closing. close its home buying and flipping business. Shares of Bed Bath & Beyond rose on a partnership announcement with KrogerBut the short squeeze likely drove the subsequent 80% increase.

Regular trading saw the Dow rise 138.79 to 36.052.63. The S&P 500 added 0.3% and the Nasdaq Composite gained 0.3%. For the third consecutive session, all three major averages set new records. Russell 2000 small cap rose slightly to an all time high.

Investors have their eyes on the Federal Reserve. It is expected that it will announce the end of its bond-buying programme on Wednesday after its meeting. Investors are also watching for signs of when the central bank will raise interest rates.

As companies continue to report strong earnings reports, shares rose Tuesday. Of the S&P 500 companies that have reported so far this earnings season, 83% of them have beat consensus expectations, according to FactSet. It’s all despite continuous supply chain disruptions, labor problems, commodity inflation and central bank policy.

Ryan Detrick is chief market strategist at LPL Financial. “Stocks look like the Energizer Bunny as they soar to new heights and show no signs that they are tiring,” he said. While we understand that there are many worries, the bottom line remains earnings are still coming in better than expected. This is helping justify current stock levels.

These highs make a possible year-end rally for investors more plausible.

Keith Lerner, Truist’s co-chief investor officer said that the primary market trend is higher. “In the eight periods since 1950 where stocks were up more than 20% through October, as they are this year, the S&P 500 tacked on additional gains by year end 100% of the time with an average gain of 6.2%.”

ADP payrolls and mortgage application data for weekly are scheduled to also be published.

CVS, Marriott and Etsy are expected to announce earnings on Wednesday before the bell. Electronic Arts, Etsy, and MGM Resorts will all report following the bell.

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