Stock futures point to an upbeat start to Wednesday’s session following a rough few days on the main indexes even as investors brace for the Federal Open Market Committee, or FOMC, policy decision about its stimulus program.
Futures on the Dow Jones Industrial Average were up 0.23 percent and futures on the S&P 500 were up 0.22 percent while those on the Nasdaq were up 0.38 percent.
According to a Wall Street Journal consensus estimate, the FOMC is expected to leave the Federal Funds rate unchanged at current levels. The announcement is due at 2 p.m. EST. But, investors will be keen to know if the Federal Reserve decides to further reduce its bond-buying program, and will look to policy wordings that could hint toward the Fed’s future course of action.
"It's clear the Fed wants to taper," Eric Stein, portfolio manager at Boston-based Eaton Vance, told Reuters.
The Fed is expected to announce -- at the end of its two-day meeting that begins Wednesday -- that it will taper, or reduce, its bond-buying program by yet another $10 billion, bringing its monthly bond purchases down to $65 billion a month.
“I think the Fed is desperate to extract itself from quantitative easing, and it will continue to scale back the program and end it this year,” Bernard Baumohl, chief global economist of the Economic Outlook Group, told MarketWatch.
However, the decision may not be an easy one as there is disagreement within the Fed’s ranks. As the Reuters report noted, the Dallas Fed President Richard Fisher wants to see a more aggressive drawing down of the Fed’s stimulus program while Minneapolis Fed President Narayana Kocherlakota has argued for more stimulus.
On the earnings front, Wednesday’s calendar includes The Boeing Co. (NYSE:BA), The Dow Chemical Co. (NYSE:DOW) and EMC Corp. (NYSE:EMC) before markets open while Facebook Inc. (NASDAQ:FB) and Qualcomm Inc. (NASDAQ:QCOM) are among those scheduled to declare earnings after market hours.
In Europe, stocks were up with the Stoxx Europe 600 index trading up 0.58 percent while the FTSE 100 was up 0.6 percent. Germany’s DAX-30 was up 0.77 percent while France's CAC-40 was up 0.49 percent.
In Asia too, markets were mostly positive with Japan’s Nikkei racing up 2.7 percent while Australia’s S&P/ASX 200 rose 1.04 percent. The Shanghai Composite index was up 0.56 percent and Hong Kong’s Hang Seng index climbed 0.82 percent. South Korea’s Kospi gained 1.26 percent, but India’s BSE Sensex slipped 0.18 percent.