Dow Futures Lower Ahead of Inflation Data and Fed Meeting

Stock index futures edged lower this morning, ahead of today’s inflation report and the start of a two-day Federal Reserve monetary policy meeting.

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LONDON — Stock index futures at 7am ET indicate that the Dow Jones Industrial Average (DJINDICES: ^DJI) may open down by 8 points this morning, while the S&P 500 (SNPINDEX: ^GSPC) may open down by 2.1 points. The CNN Fear & Greed Index remains neutral, and is set to open at 51, after closing at 48 yesterday.

European stock markets pulled back from five-year highs this morning, as investors took profits on yesterday’s gains, ahead of tomorrow’s expected announcement about cuts to the Federal Reserve’s bond-buying programme. In London, Lloyds Banking Group fell 2.4% to 75.5p on news that the UK government had sold 6% of its 38% stake in the bailed-out bank to institutional investors, marking the first stage of Lloyds’ return to private ownership. Across Europe, carmakers fell on news that new car sales dropped by 4.9% in Europe during August. At 7am ET, the FTSE 100 was down 0.41%, the DAX was down 0.20%, and the CAC 40 was down 0.30%.

In the US, the Federal Open Markets Committee begins its two-day policy committee meeting today. According to Bloomberg, analysts’ consensus estimates currently indicate that a $10bn reduction in monthly bond purchases is likely, which would take the monthly total from $85bn to $75bn. At 8.30am ET, the consumer price index for August is expected to show that the rate of inflation slowed to 0.1% last month, down from 0.2% in July. At 10am, September’s home builders’ index is expected to read 59, leaving it unchanged from August.

Today’s corporate earnings calendar is almost empty, but FactSet Research Systems is scheduled to report its fourth-quarter results before this morning’s opening bell, as is cosmetics manufacturer Coty, which is expected to report earnings of $0.02 per share on revenues of $1.05bn. Adobe Systems is scheduled to release its fiscal third-quarter results after the close tonight, and the firm’s shares could see active trade during today’s session. Analysts’ consensus forecasts suggest earnings of $0.34 per share on revenue of $1.01bn for Adobe, down from $0.58 and $1.08bn for the same period last year.

Other stocks that may be actively traded today include Outerwall, after the video rental kiosk firm — formerly known as Coinstar — fell 20% in after-hours trading last night, after slashing its full-year earnings guidance and reporting a sharp drop in revenue per user.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

> Roland does not own shares in any of the companies mentioned in this article. 

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