Futures flat as investors reevaluate Fed decision

Most are expecting increased volatility in equity markets on Friday as index managers rebalance their portfolios.

By Benzinga Sep 20, 2013 8:33AM

zurbar age fotostockBy Laura Brodbeck


U.S. markets leveled out on Thursday after posting record high gains on Wednesday following the Federal Reserve's decision to keep its stimulus spending unchanged.


Most are expecting to see increased volatility in equity markets on Friday as index managers rebalance their portfolios.


Top news

In other news around the markets:

  • The Fed's decision to maintain its $85 billion per month stimulus has created uncertainty about the bank's ability to communicate its intentions.


  • Despite criticism about the pricing of Apple's (AAPL) new iPhone, it is expected to have a record debut as it goes on sale on Friday in the U.S., UK, Germany, France, Singapore, and Hong Kong. It will also go on sale in China for the first time on the same day as the rest of the world. The iPhone's performance in China will be particularly important as many worry the iPhone is priced too high for the market there.

  • The Reserve Bank of India's new Governor Raghuram Rajan surprised analysts by increasing interest rates in an effort to control inflation. Most were expecting Rajan to maintain the benchmark interest rate, but his decision to raise it was seen as a determined effort to fight inflation and get the nation back on track.

  • The Reserve Bank of Australia board member John Edwards voiced his frustration with the Federal Reserve's decision not to taper, which has pushed the Australian dollar to a three month high. He also expressed concern that the Fed sees the U.S. economy as too weak to stand on its own, and worries about the bank's revised, lower forecast for 2013 and 2014.

Asian markets

Asian markets were mixed heading into the weekend. The NIKKEI was down 0.26%, and the KOSPI lost 0.39%. China's Shanghai composite was up 0.29% along with the Shenzhen composite, which gained 0.49%. The Hang Seng index had the largest gains, up 1.67%.


European markets

European markets were quiet on Friday with minimal losses. The UK's FTSE was down 0.15%, and the STOXX 600 lost 0.02%. The DAX lost 0.14%, and France's CAC 40 was down 0.17%.


Commodities

Brent futures gained 0.19% on Friday, but WTI futures were down 0.08%. Gold lost 0.76%, and silver was down 2.00%. Industrial metals fared better with aluminum up 2.46% and tin up 1.28%.


Currencies

The euro to dollar ratio was relatively flat, and the pound gained 0.11% against the dollar. The yen strengthened 0.18% against the dollar, and the Australian dollar was unchanged at $0.9437.


Earnings

Notable companies that reported earnings on Thursday included:

  • ConAgra Foods (CAG) reported earnings per share of $0.37 on revenue of $4.20 billion, compared to last year's earnings per share of $0.44 on revenue of $3.31 billion.

  • IHS (IHS) reported earnings per share of $1.27 on revenue of $480.30 million, compared to last year's earnings per share of $0.99 on revenue of $385.61 million.

  • Pier 1 Imports (PIR) reported earnings per share of $0.17 on revenue of $395.64 million, compared to last year's earnings per share of $0.19 on revenue of $367.62 million.

  • Rite Aid (RAD) reported a loss of $0.04 per share on revenue of $6.30 billion, compared to last year's loss of $0.05 per share on revenue of $6.23 billion.

Premarket movers

Stocks moving in the premarket included:

  • Fifth Street Financial (FSC) lost 3.61% in premarket trade after news that the company priced a public offering of 15.5 million shares at $10.31 per share

  • BioMarin Pharmaceutical (BMRN) was up 4.06% in premarket trade after news that Roche (RHHBY) was looking to acquire the company.

  • ONYX Pharmaceuticals (ONXX) was up 0.97% in premarket trade after Amgen (AMGN) announced that it had received approval on its acquisition of ONYX.

  • Cisco Systems (CSCO) lost 1.23% in premarket trade after Credit Suisse gave the stock an "underperform" rating.

  • Facebook (FB) was up 0.57% in premarket trade as the company worked to show the effectiveness of ads placed on its site.

Economics

Friday's economic calendar includes eurozone consumer confidence, Canadian CPI, Spanish trade balance and Italian industrial sales.


More from Benzinga

1Comment
Sep 20, 2013 9:32AM
avatar
Surprise, Surprise, The  Fed is worried the economy is bad shape.   What did you expect with Food Stamps up 75% under Obama?   The number of poor is up sharply. The number of unemployed continues to be bad.

Obamanomics continues to cripple the real economy, all the while making the rich, richer.  Does anyone really think the stock market being propped up by the FED helps the those that do not own shares?   Take a look at the South and West sides of Chicago...  Do you see the new Detroit?  Are taxpayers fleeing Chicago and Illinois?  Of course they are.  The state of Illinois debt is so bad that every resident there will have to come up 30,000 in the next few years.  Why not just leave and let the idiots left behind pay the bill for socialism?  


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