Dow Futures Lower Ahead of Inflation Data and Fed Meeting

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.

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.