U.S. stock futures advanced Wednesday morning, pointing to a higher open on Wall Street, but trading is expected to be cautious as investors await the Federal Reserve policy statement this afternoon, which would also give clues about the state of the economy. Meanwhile, another group said the global recession is near a bottom, but flared up concerns over banks again. More economic data due out later this morning could the market a better sense of direction.The Organization for Economic Cooperation and Development (OECD) said Wednesday the deepest global recession in over 60 years is close to bottoming out. While this view may be more optimistic than the World Bank's or the IMF recently, the OECD has similar projections regarding the recovery, which will be weak unless governments do more to remove uncertainty over banks' balance sheets.
At 2:15 PM, the Federal Reserve Open Market Committee will conclude its two-day policy meeting with a statement to the public. While no rate action is expected, and with signs the economy is improving but still fragile, the Fed could be considering some programs intended to drive down rates on mortgages and slow down other consumer debt. Investors will be interested to know the policymakers' outlook on the economy and the statement is likely to be cautious in tone, especially regarding the recovery.
Perhaps relieving concerns somewhat are reports this morning U.S. mortgage applications climbed last week from a seven-month low.
Overseas, Asian markets finished with gains, and European stock markets also rose modestly Wednesday, all looking for direction from the Fed statement. The European Central Bank, meanwhile, took action and said it will lend banks 442 billion euros ($621 billion) for 12 months, stepping up efforts to unblock credit markets in the euro region. And oil prices fell below $69 a barrel Wednesday, partially reversing gains sparked by a weakening U.S. dollar, and ahead of the weekly crude inventory report to be released at 10:30 AM.
Other economic indicator today include May durable goods orders, due out at 8:30 a.m., which economists are expecting to show a decline, and May new home sales report, due out at 10:00 AM and which economists expect a rise in the annual sales rate from last month.
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