Futures dip ahead of Fed meeting
The Federal Reserve is expected to announce a pullback in its stimulus program.
The Federal Reserve will begin its two day meeting today, at which most are expecting to see the bank begin to taper its stimulus program by $10 to $15 billion and maintain current interest rates.
The Fed is also expected to reiterate its forward guidance, with a 6.5% unemployment threshold. Besides the size of the taper, investors will be focused on the bank's forecast of interest rates in 2016 as it will provide insight about the pace of future rate increases.
In other news around the markets:
* Lawrence Summers' withdrawal from the race to the top job at the Federal Reserve has left Fed Vice Chairwoman Janet Yellen as the frontrunner. Although President Barack Obama hasn't made a decision yet, no new candidates have been added for consideration. A nomination from the president isn't expected until next week at the earliest.
* On Monday, the United Nations released a report on the chemical attack in Syria, which the White House has said adds to evidence the attack was carried out by the Syrian government. Although the purpose of the report was not to assign blame, officials say several of the UN inspectors' findings point to the Syrian government's involvement. In light of the new information, the U.S. has renewed a push for harsh punishments for Damascus if it does not follow the UN's disarmament plan.
* The Reserve Bank of Australia released the minutes of its latest policy meeting that indicate the bank is open to cutting rates in the future if need be. The bank's members said the drop in mining investment and the subdued outlook for non-mining investment is still weighing on the country's growth prospects. Although a rate cut is not imminent, the RBA members agreed not to close the door on the possibility in the future.
* In Italy, support for Silvio Berlusconi and his political party is falling according to polls. The Italian newspaper, La Republica, reported that Berlusconi's People of Liberty party had fallen to 26.2%, behind the center-left party. Berlusconi's decline in popularity could help extinguish his threats to take down the government.
* European stocks tumbled on Tuesday after the British government sold a 6%, or 3.2 billion pound, stake in Lloyds. The big move sparked a sell off and caused markets to pull back.
Asian markets slid with the Fed taper looming. The Shanghai composite was down 2.05%, and the Shenzhen composite lost 1.56%. The Japanese Nikkei was down 0.65%. The region's FTSE Asia 100 index was down 0.81%.
European markets began the day on their back foot with losses across the board. The UK's FTSE was down 0.36%, and the Eurozone's STOXX 600 lost 0.45%. The Spanish IBEX lost 0.90%, and Italy's MIB was down 0.71%.
Brent futures were down 0.40%, and WTI futures lost 0.62%. Metals were mostly higher, Gold was up 0.08%, silver gained 0.10%, copper was up 0.67% but aluminum lost 0.45%.
The euro gained 0.11% against the dollar, and the pound was up 0.15% against the dollar. The yen lost 0.18% against the dollar and climbed again towards the 100 yen to one dollar mark. The Australian dollar was flat against the greenback, and the rupee lost 0.25% against the dollar.
Notable Earnings Reported on Monday:
Cvent (CVT) reported second quarter earnings per share of $0.04 on revenue of $26.90 million, compared to expected earnings per share of $0.05 on revenue of $26.80 million.
Stocks moving in the premarket included:
Carnival (CCL) gained 0.94% in premarket trade after the company pulled up the Costa Concordia cruise ship, which crashed into the Italian coastline last year.
Kellogg (K) was down 0.71% in premarket trade after gaining 1.19% over the past five days.
Notable earnings expected on Tuesday include:
Adobe Systems (ADBE) is expected to report earnings per share of $0.34 on revenue of $1.01 billion, compared to last year's earnings per share of $0.58 on revenue of $1.08 billion.
Tower Group (TWGP) is expected to report a loss of $0.52 per share on revenue of $421.10 million, compared to last year's loss of $0.34 per share on revenue of $417.61 million.
Economic releases expected on Tuesday include New Zealand and the eurozone's current account, U.S. CPI, eurozone and German ZEW economic sentiment, as well as British PPI and CPI.
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The company plans to close stores and lay off employees, and says it needs to make some deeper changes.
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