Stock Futures Cautious as Fed Meet on Stimulus
NEW YORK ( TheStreet) -- Stock futures were little changed Tuesday as investors awaited guidance from the two-day Federal Open Market Committee meeting that begins Tuesday.
The Goldman Sachs financial conditions index shows that the economy has worsened since the committee's July meeting owing largely to higher interest rates. Goldman Sachs anticipates the Fed will announce the beginnings of a "soft taper" at this week's meeting, featuring a widely expected $10 billion cut to the monthly rate of asset purchases.
"Mortgage rates have continued to rise, an area that is likely of particular concern for the Fed," Jan Hatzius, a Goldman Sachs economist said in an investor note.
Futures for the S&P 500 were up 0.5 points, or 1.85 points below fair value, to 1,691.75. Futures for the Dow Jones Industrial Average were rising 10 points, or 36.22 points above fair value, to 15,441. Futures for the Nasdaq were up 4.5 points, or 5.41 points above fair value, to 3,165.5.
Despite the overall lackluster futures action, a number of stocks were garnering attention. Huntsman
The Bureau of Labor Statistics reported tame inflation numbers Tuesday saying that the consumer price index increased by a less-than-expected 0.1% in August after gaining 0.2% in July. Economists were expecting an increase of 0.2%, according to a Thomson Reuters survey of economists. The core price index, excluding food and energy, edged up by an as-expected 0.1% after rising 0.2% for a third straight month.
Dan Greenhaus, the chief global economist at BTIG in New York, commented in a client note that despite the subdued inflation figures he still expects the Fed to reduce the pace of asset purchases at this week's FOMC meeting because he doesn't see that the Fed views further purchases as worth the potential cost.
"The weak inflation prints support the Fed in its efforts to stimulate the U.S. economy even though the composition and form of that stimulus may change," he noted.
The National Association of Home Builders' housing market index, out at 10 a.m., is expected to remain at 59 for September.
The FTSE 100 was down 0.33% while the DAX in Germany was off 0.19%. The Hong Kong Hang Seng settled down 0.31% while the Nikkei 225 in Japan closed down 0.65%.