US stocks were lower Wednesday as investors await the minutes of the last Federal Reserve meeting that will deliver insight on the trajectory of interest rates.
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Yields on two-year US government bonds notes briefly touched a near three-week high of 0.758 percent, but they failed to reach the July peak of 0.778 percent and were last at 0.750 percent.
Yields on two-year notes briefly touched a near three-week high of 0.758 percent but failed to reach the July peak of 0.778 percent and were last at 0.750 percent. Dudley reiterated that we are edging closer towards the point where it will be appropriate to raise interest rates further, noting that September was possible.
Moreover, the minutes from the 26 – 27 July FOMC meeting will be published on Wednesday, 17 August at 18:00 GMT.
“All of this suggests that there may be little guidance from the minutes about the direction that the Fed is likely to take in the near term”.
William Dudley, head of the Fed’s NY branch, said a rate hike was possible next month and that Wall Street investors were too “complacent” about the prospect of higher rates over the next year. “These minutes show a multitude of opinions with no clear voice on when to hike rates, so are less hawkish than the market had been expecting”.
MarketWatch points out that’s a big if and bars any unexpected changes or disruptions in output and/or transport caused by anything from terrorist attacks to major hurricanes, or from production or price decisions by OPEC, the Organization of Petroleum Export Countries. One member of the policy-making board, William Dudley, said earlier that it was premature to rule out further increases this year and another member, Dennis Lockhart, has said there could be two hikes in 2016.
Nine of the 10 major S&P 500 indexes were lower, with the interest rate-sensitive sectors – telecom service providers .SPLRCL falling the most.
At 13:06 p.m. ET (1706 GMT), the Dow Jones industrial average .DJI was down 22.29 points, or 0.12 percent, at 18,529.73, the S&P 500 .SPX was down 2.5 points, or 0.11 percent, at 2,175.65 and the Nasdaq Composite index .IXIC was down 7.86 points, or 0.15 percent, at 5,219.25.
The oil price slide left Brent crude futures down 0.6 percent at $48.92 a barrel, while USA crude retreated 0.4 percent to $46.40.
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MSCI’s broadest index of Asia-Pacific shares outside Japan dipped 0.05 percent while Japan’s Nikkei rose 0.4 percent, paring some of Tuesday’s sharp losses. Its stock sank $1.62, or 12.2 percent, to $11.75. The move pushed oil prices lower by almost 1 per cent. It rose about 0.1 percent Wednesday. West Texas Intermediate (WTI) logged a 1.8% gain to end at a support level of $46.58 a barrel, setting a fresh one-month high as it inches its way closer to a key resistance level of $50 a barrel.
