U.S. Stocks May Lack Direction Ahead Of Next Week’s Fed Meeting

Following the upward move seen over the past several sessions, stocks may show a lack of direction in early trading on Friday. The major index futures are currently pointing to a roughly flat open for the markets.

Traders may be reluctant to make significant moves ahead of the Federal Reserve’s monetary policy meeting next week.

While the Fed is almost universally expected to leave interest rates unchanged, traders are likely to pay close attention to the accompanying statement for clues about the outlook for rates.

Recent economic data has led to concerns about the Fed leaving rates on hold for a prolonged period, but many economists still expect the central bank to resume cutting rates sometime in the first half of the year.

CME Group’s FedWatch Tool is currently indicating a 69.9 percent chance rates will be lower by at least a quarter point following the Fed’s June meeting.

Not long after the start of trading, the National Association of Realtors is scheduled to release its report on existing home sales in the month of December.

Existing home sales are expected to climb to an annual rate of 4.19 million in December after surging to a rate of 4.15 million in November.

The University of Michigan is also due to released its revised reading on consumer sentiment in the month of January.

The consumer sentiment index for January is expected to be unrevised from the preliminary reading of 73.2, which was down from 74.0 in December.

Stocks moved mostly higher over the course of the trading day on Thursday, extending the strong upward move seen over the past several sessions. The S&P 500 closed higher for the seventh time in the past eight sessions, reaching a new record closing high.

The major averages reached new highs going into the close of trading. The Dow jumped 408.34 points or 0.9 percent to 44,565.07, the S&P 500 climbed 32.34 points or 0.5 percent to 6,118.71 and the Nasdaq rose 44.34 points or 0.2 percent at 20,051.68.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher on Friday. Hong Kong’s Hang Seng Index surged by 1.9 percent and South Korea’s Kospi advanced by 0.9 percent, although Japan’s Nikkei 225 Index bucked the uptrend and edged down by 0.1 percent.

Meanwhile, the major European markets are turning in a mixed performance on the day. While the U.K.’s FTSE 100 Index is down by 0.3 percent, the German DAX Index is up by 0.1 percent and the French CAC 40 Index is up by 0.7 percent.

In commodities trading, crude oil futures are rising $0.34 to $74.96 a barrel after sliding $0.82 to $74.62 a barrel on Thursday. Meanwhile, after slipping $5.90 to $2,765 an ounce in the previous session, gold futures are climbing $24 to $2,789 an ounce.

On the currency front, the U.S. dollar is trading at 156.34 yen versus the 156.05 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.0466 compared to yesterday’s $1.0484.

Business News