Before the bell: Futures lower ahead of data; Fed meeting in focus

Posted Dec 15th 2009 7:45AM by Melly Alazraki
Filed under: Before the Bell, International Markets, General Electric (GE), Market Matters, Best Buy (BBY), Economic Data, Wells Fargo (WFC), Oil, Federal Reserve

U.S. stock futures declined somewhat Tuesday morning as investors await several key economic reports and anticipate the Federal Reserve's two-day policy meeting beginning today. Meanwhile, Wells Fargo joined Citigroup and repaid its bailout fund.

On Monday, Wall Street finished on a higher note after Exxon Mobil's (XOM) $41 billion acquisition of XTO Energy (XTO) boosted the mood of the market. Abu Dhabi's bailout of Dubai and Citigroup's repayment of TARP money also helped push markets higher.

This morning several economic reports are in focus:

At 8:30 a.m., the Commerce Department will report November's Producer Price Index (PPI), a measure of inflation at the wholesale level. PPI is expected to have risen 0.8% in November after rising 0.3% in October. Core PPI, which excludes the often volatile food and energy prices, is expected to have risen 0.2% after falling 0.6% in October.
At the same time, December Empire Manufacturing is due, and is expected to have inched up.
At 9:15 a.m., shortly before the opening bell, the Federal Reserve will report the November capacity utilization and industrial production. Capacity utilization is expected to have risen to 71.1% from 70.7% in October. Industrial production is expected to have risen 0.5% after rising 0.1% in October.

Also in focus today is the Federal Reserve's two-day policy meeting. While no announcement will be made until Wednesday afternoon, the Federal Open Market Committee is expected to leave interest rates at a record low this week. The big question is whether the statement will hint about when the Fed will start reversing course and boost rates. The Fed, at some point, will have to begin to rein in the unprecedented amount of money it has plowed into the economy to bolster the recovery.

Overseas, markets barely reacted to several news events Tuesday, although the general direction was negative. The euro slid to a two-and-a-half-month low against the dollar on worries about the Greek government's debts and the financial health of Austria's banks. German investor confidence, too, declined for a third month in December as analysts became more "realistic" about the outlook for the economic recovery. Meanwhile Dubai, said to need more than the $10 billion bailout from Abu Dhabi it received Monday, has yet to convince investors it will meet all of its obligations.

Also, oil finally paused on Tuesday below $70 a barrel after falling for nine straight days.

Of companies in focus today is Well Fargo (WFC), which has repaid TARP, Best Buy (BBY), which is scheduled to report earnings, and General Elecrtic (GE), which has an investors' meeting today.

Tags: featured