LONDON — Stock index futures at 7am ET indicate that the Dow Jones Industrial Average (DJINDICES: ^DJI) may open down by 1 point this morning, while the S&P 500 (SNPINDEX: ^GSPC) may open down by 1.6 points. The CNN Fear & Greed Index remains neutral, and is set to open at 46, after closing at 47 yesterday.
European markets edged slightly lower this morning as traders took profits and trimmed their positions ahead of next week’s US monetary policy meeting, which takes place on 17-18 September and is expected to mark the start of a gradual reduction of US monetary stimulus operations. According to Bloomberg, analysts’ consensus forecasts currently suggest that the Fed’s monthly bond purchases will be cut by $10bn, from $85bn to $75bn. There’s also some uncertainty about who will replace Fed Chairman Ben Bernanke when he steps down at the end of January. In London, mining companies were the biggest fallers, helping to drag the index into the red by 7am ET, when the FTSE 100 was down 0.25%, the DAX was down 0.08%, and the CAC 40 was down 0.17%.
Yesterday’s US jobless claims figures were largely discounted by the markets, after computer problems in two states left the figures incomplete, but today’s raft of economic reports should be more reliable. At 8.30am ET, August’s retail sales report is expected to show a 0.5% increase in sales last month, following a 0.2% increase in July. Also at 8.30am, August’s producer price index is expected to show a 0.2% increase in prices last month, following a flat reading in July, while at 9.55am, September’s University of Michigan consumer sentiment index is expected to fall back to 81.5, from 82.1 in August. Finally, at 10am, the latest business inventories report is expected to show that inventories edged up 0.2% in July, after staying flat in June.
It’s expected to be a quiet day for corporate results, but amongst the companies that could be actively traded are Intel, which rose by 1.8% in pre-market trading after an upgrade from Jefferies Group, and Safeway, which also benefited from a broker upgrade, and was up 1.9% in pre-market trading. Cosmetics firm Ulta may also perform strongly, after its share price rose by 13.8% in pre-market trading this morning, following a strong earnings report last night.
Finally, let’s not forget the Dow’s daily movements can add up to some serious long-term gains. Indeed, Warren Buffett recently wrote: “The Dow advanced from 66 to 11,497 in the 20th Century, a staggering 17,320% increase that materialized despite four costly wars, a Great Depression and many recessions.“
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> Roland does not own shares in any of the companies mentioned in this article.