Dow Jones Industrial Average
was set for a higher open Wednesday as China Evergrande fears ebb and a key decision from the U.S. Federal Reserve looms.
Futures for the
Dow Jones Industrial Average
were up 188 points, or 0.6%, Futures for the
indicated a similarly strong open after a rally Tuesday fizzled out and failed to end with gains.
“Markets are trading with a risk-on tone this morning after some positive Evergrande developments while focus continues to shift to the conclusion of today’s Fed meeting,” writes The Seven Report’s Tom Essaye.
The Federal Open Market Committee’s two-day meeting ends Wednesday, and Fed Chair Jerome Powell will make a subsequent statement.
The Fed is considering when to slow, or taper, its Covid-19 pandemic-era program of monthly asset purchases, which add liquidity to markets. Any indication that a taper will come sooner rather than later has the potential to wobble stocks.
Officials at the central bank will also update their projections of future interest rates—the “dot plot”—and inflation.
Jim Reid, a strategist at Deutsche Bank, said the group’s economists “see Powell maintaining optionality about the exact timing of that announcement, but they think that the message will effectively be that the bar to pushing the announcement beyond November is relatively high in the absence of any material downside surprises.”
Meanwhile, fears centered on China Evergrande Group, the world’s most indebted property developer whose looming failure threatens to spill beyond China, remained, but they appeared to stabilize. Chinese markets returning from a two-day break didn’t crash, as some had expected. Instead, the Shanghai Composite rose 0.4%.
“One key event is China’s troubled property developer Evergrande striking a deal over a bond repayment, thereby bringing a sense of relief to markets we might not see the business collapse—something that could cause ripples in multiple markets,” said Russ Mould, an analyst at broker AJ Bell.
Read more: China Evergrande: What’s Next, What to Watch, and Whether to Buy the Dip
“Evergrande still has plenty of problems to fix including more bond payments later this week, but today’s deal would suggest catastrophe is not immediately around the corner,” Mould added.
Reid of Deutsche Bank noted that the Chinese central bank had increased its short-term cash injections into the economy, adding 90 billion yuan ($13.9 billion) into the system.
Also read: China Evergrande Reaches Deal on Key Domestic Bond Payment. What That Means.
The stabilization in China, at least for the moment, has also given commodities a boost. Continuous contract futures for copper rose 2.5%, while international oil benchmark Brent rose 1.4% to around $75.40 a barrel, and U.S. crude futures similarly rose 1.2% to $71.60.
Here are eight stocks on the move Wednesday:
‘s (3333.H.K.) Hong Kong stock wasn’t trading due to a holiday, shares of the company listed in Frankfurt (EV1.Germany) surged nearly 40% after the group struck a deal related to onshore bond payments.
rose 8.1% in London, after the sports betting and gambling group said it was considering a takeover offer from DraftKings. The shares jumped 19.6% Tuesday following a report of a bid. Meanwhile,
(DKNG) stock slipped 7.4% Tuesday and the shares were down a further 0.5% in the U.S. premarket.
(GIS) has gained 3.1% after reporting a profit of 99 cents a share, beating forecasts for 89 cents, on sales of $4.54 billion, topping expectations for $4.29 billion.
FedEx (FDX) has dropped 5.7% after reporting a profit of $4.37 a share, missing expectations for $4.88 a share, on revenue of $22 billion, ahead of forecasts for $21.9 billion.
(INCY) has dropped 2.7% after the FDA approved its atopic dermatitis treatment but with limitations.
(BIIB) has fallen 2.7% after STAT reported that slow sales of the company’s Alzheimer’s treatment has it considering layoffs.
(SOFI) has gained 4.6% after Jefferies initiated the company at Buy.
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