Yet again, the US-China trade talks have found their way back onto the agenda, with some quarters seen as expressing concern that negotiators in Washington are now pushing back against some of the demands coming from Beijing. That’s propping up the greenback, but it doesn’t seem to be translating through to equities just yet, although attention now is well and truly focused on the FOMC’s monetary policy comments later in the session.
It’s looking increasingly difficult for this to be ‘good news’ for stocks, as one school of thought suggests the Fed will claim there’s still scope for a rate hike this year, defying a market which currently has a 33% chance of a rate cut by next January priced in. Others suggest the economic outlook given by the Fed will be so downbeat as to pose a threat to domestic consumption, again a negative for equities.
There may still be a sweet spot in the middle, but yesterday’s shortfall by FedEx (NYSE:FDX) could be seen as something of a warning bell too, given that distribution sits at the heart of the economy.
Ahead of the open we’re calling the Dow up 13 at 25900 and the S&P 500 up 1 at 2834.