Stock futures plunge as Fed gives no indication of stimulus

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U.S. equity futures fell ahead of Thursday’s Wall Street session as concerns mount over further coronavirus stimulus.

The main forward indices suggest a decline of 1.0%, or more than 200 Dow points.

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The US Federal Reserve said on Wednesday that its benchmark interest rate would stay close to zero until at least 2023, but did not announce any further stimulus packages.

President Jerome Powell has promised the Fed “that we will not lose sight of the millions of Americans who remain out of work,” but gave no indication of further stimulus.

Following comments from the Fed, the Wall Street S&P 500 benchmark closed 0.5% lower. The Dow Jones Industrial average rose 0.1% to 28,032.38. The Nasdaq composite lost 1.3% to 11,050.47.

Teleprinter security Latest Change Change%
I: DJI MEDIUM DOW JONES 28032,38 +36,78 + 0,13%
SP500 S&P 500 3385,49 -15,71 -0,46%
I: COMP INDEX COMPOSITE NASDAQ 11050,469071 -139,85 -1,25%

On Thursday, the Labor Ministry is expected to say that the number of jobless claims fell to 850,000 last week, down 34,000 from the previous week’s total of 884,000 and the lowest reading since the 14th. March, just before the coronavirus lockdowns.

The Commerce Department is expected to say the number of new homes built slipped 1.2% in August to a seasonally adjusted annual rate of 1.478 million. For context, housing starts fell to a 5-year low of 934,000 at the pandemic low in April. Future building permits are forecast to increase 2.5% to 1.52 million.

Finally, the Philly Fed released its September index of manufacturing activity for eastern Pennsylvania, southern Jersey and Delaware. It is expected to drop to 15 from 17.2 in August.

FED SIGNALS INTEREST RATES WILL STAY NEAR ZERO UNTIL 2023 TO BOLSTER THE AMERICAN ECONOMY

In Asia, on Thursday, the Japanese central bank left interest rates unchanged and gave no indication of possible further stimulus.

Tokyo’s Nikkei fell 0.7%, Hong Kong’s Hang Seng fell 1.6%, and China’s Shanghai Composite Index fell 0.4%.

In Europe, London’s FTSE is down 0.8%, Germany’s DAX is down 0.8% and France’s CAC is down 0.9%.

U.S. investors are counting on Congress for a new support package after additional unemployment benefits expire that help support consumer spending, but lawmakers are deadlocked on its possible size.

The Fed predicts the economy will contract 3.7% this year, an improvement from its June outlook of 6.5% decline. The Fed has projected an unemployment rate at the end of the year of 7.6% instead of the 9.3% projected in June.

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In energy markets, benchmark US crude oil for October delivery fell 18 cents to $ 39.98 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose from $ 1.88 on Wednesday to $ 40.16. Brent crude oil for November delivery fell 15 cents to $ 42.07 a barrel in London. He earned $ 1.69 the previous session to $ 42.22.

The Associated Press contributed to this article.

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