Following global markets, U.S. stock futures advanced Wednesday morning ahead of first-quarter gross domestic product, a policy decision from the Federal Reserve and more corporate earnings. Generally, investors hope GDP will show the economy's free fall has stabilized, and at least now the indication is that markets will open higher.At 8:30 a.m. Eastern, the government is set to release first quarter GDP, the most comprehensive measure of economic activity. Economists expect the report to show the economy shrank at a pace of 5% in the first three months of this year, after contracting at a 6.3% annual rate in the fourth-quarter of last year. I've seen estimates as low as a 4% contraction.
[Update 9:10 a.m.: Futures remained higher even after GDP nosedived 6.1% in the first quarter.]
Meanwhile, banks will remain in focus, as at least six of the 19 largest U.S. banks require additional capital, according to preliminary results of government stress tests, Bloomberg reported. Most of the capital is likely to come from converting preferred shares to common equity.
The Federal Reserve will release a policy statement at 2:15 p.m. following a two-day policy meeting that took fresh stock of economic and financial conditions. Most economists are betting there won't be any major announcements given the Fed's bold $1.2 trillion move just last month to revive the economy.
Overseas, world stock markets rallied Wednesday after better-than-expected U.S. economic data on Tuesday fueled hopes that the world's largest economy was showing tentative signs a recovery is imminent, offsetting fears over the economic impact of a possible swine flu pandemic.
Oil prices rose above $50 a barrel Wednesday on economic hopes, but these were tempered on concerns that a swine flu outbreak could further depress demand. At 10:30 a.m., weekly crude inventories data will be released, possibly adding pressure to oil prices if they show considerable build-up.
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