Monday Morning Cheat Sheet: 3 Stories Moving Markets
It’s Monday, October 28, and U.S. stock futures were mixed ahead of the opening bell. Investors are looking forward to the Federal Reserve’s report on industrial production, which is expected to show that total production growth remained consistent in September at +0.4 percent. Manufacturing growth is expected to slow to +0.3 percent from +0.7 percent, in line with data released last week that showed a broad slowdown in manufacturing output.
For its part as a try-hard foil to fiscal policy — which, even outside of the shutdown, has been a drag on economic growth — the Fed and its still highly accommodative monetary policy has moved back into focus. The Federal Open Market Committee begins a two-day policy meeting tomorrow, and traders signaled their belief that the stimulus would continue by driving the dollar to a nine month low against a basket of reference currencies.
It is unclear how long quantitative easing (the program under which the Fed is purchasing $85 billion worth of assets in the open market each month) is likely to last for. Tapering was expected, but not delivered, following the last FOMC policy meeting, but in the wake of the partial shutdown and with current vice chair Janet Yellen set to take the helm at the start of the new year, the taper timeline has become opaque, and markets seem comfortable settling back into a QE-dominated environment. At 8:45 a.m., Dow futures were off 0.06 percent, S&P 500 futures were off 0.06 percent, and Nasdaq futures were up 0.04 percent.