Weighing on sentiment were disappointing results from Target, down 6.1 percent as of 3.16pm in NY, as well as from Lowe’s, down 5.5 percent.
Advertisement
The FOMC agreed to monitor the near-term effects of the United Kingdom referendum before making any further rate moves, but was generally more optimistic about global downside risk.
At 9:33 a.m. ET, U.S. crude was down 0.9 percent at $46.17.
The dollar recovered from Monday’s plunge of the USDJPY to Y99.53, reaching a high of JPY101.10 in Asia before consolidating in Europe and the U.S.at around Y100.35. Some members of the Federal Open Market Committee, the Fed’s policy-setting group, thought the economy may be strong enough for them to normalize policy further, the latest Fed minutes showed. His firm oversees about $20 billion. We continue to expect a December rate hike. That would be the second rate hike in the Fed’s agonizingly slow process of “normalizing” rates following the 2007 to 2009 financial crisis. Historically speaking, the Fed chooses not to raise rates in a presidential election year, but because of the lead Hilary Clinton holds in the polls, we believe markets have been able to begin pricing in the election results.
Some Federal Reserve members pushed for a rate hike at the Federal Open Market Committee’s (FOMC) most recent meeting. Market participants are looking for clues about prospects and timing of a future interest-rate rises.
“Several suggested the committee would likely have ample time to react if inflation rose more quickly than they now anticipated, but they preferred to defer another increase until they were more confident inflation was moving closer to 2% on a sustained basis”, according to the minutes of the Federal Open Market Committee’s meeting.
New York Fed President William Dudley and Atlanta Fed President Dennis Lockhart yesterday indicated that a rate hike this year remained a possibility. Just one, Kansas City Federal Reserve Bank chief Esther L. George, favored pushing the rate’s target range to between 1/2 and 3/4 percent. After liftoff from near zero in December, officials have twice cut their projections for the path of rates this year, as improving US economic data contrast with signs of slowing growth overseas.
In a client note, they said they expected a hike to come at the committee’s December meeting, when data on trends and labor market strength could be more persuasive.
A rate hike would likely see the price of gold fall as it increases the opportunity cost of bullion, which doesn’t pay any interest or a dividend, while also boosting the dollar which tends to pull in the opposite direction to the yellow metal.
Bond prices are rising and the yield on the 10-year Treasury fell to 1.57 percent. The greenback was little changed Wednesday at $1.1289 per euro and 100.28 yen. South Korea’s won tumbled the most since June.
The S&P 500 large-cap index closed up 0.2%, reversing an earlier decline of 0.4%. Equities rebounded as utilities, health-care and financial stocks shook off earlier declines. Target and Lowe’s each lost more than 5.6 percent. Urban Outfitters jumped 16 percent on solid sales.
The S&P/TSX composite index in Toronto shed 5.84 points to 14,697.60, with gold and materials stocks being the biggest weights. ASML Holding NV sank after Intel Corp. said it won’t use the semiconductor-equipment maker’s lithography technology to make some of its chips. Average hourly earnings, which was probably the most important part of the report grew 2.4% year over year.
Federal Reserve officials believed last month that near-term risks to the US economy had subsided and that an interest rate increase could soon be warranted. Saudi Arabian shares dropped the most in nearly three months. Oil was down 25 cents to $46.33 a barrel in NY.
Advertisement
Crude inventories fell by 2.51 million barrels in the week ended August 12, according to an Energy Information Administration report. A Bloomberg survey ahead of the data had forecast an inventory build of 950,000 barrels.
