Overnight Markets And News

Dec E-mini S&Ps (ESZ18 +0.21%) this morning are up +0.21% and European stocks are up +0.17% ahead of the conclusion of today’s FOMC meeting where the market is expecting a 25 bp rate hike in the fed funds rate target. The main focus will be the Fed’s updated projections for the economy and monetary policy and the language of the post-meeting statement as to whether policymakers intend to increase interest rates again at the December FOMC meeting. Weakness in energy stocks is limiting the upside in stock indexes with Nov WTI crude oil (CLX18 -0.32%) down -0.28% after the API reported late Tuesday that U.S. crude inventories rose +2.9 million bbl last week. Asian stocks settled mostly higher: Japan +0.39%, Hong Kong +1.15%, China +0.92%, Taiwan-0.04%, Australia +0.10%, Singapore +0.09%, South Korea closed for holiday, India -0.30%. China’s Shanghai Composite rallied to a 1-3/4 month high after MSCI said it’s considering increasing the weight of mainland Chinese shares in its global indexes. Japan’s Nikkei Stock Index rose to an 8-month high on reduced trade concerns after Japanese Economy Minister Motegi said he and U.S. Trade Representative Lighthizer agreed on the general direction of trade relations after bilateral trade talks in New York on Tuesday.

The dollar index (DXY00 +0.18%) is up +0.15%. EUR/USD (^EURUSD -0.19%) is down -0.16%. USD/JPY (^USDJPY-0.03%) is down -0.04%.

Dec 10-year T-note prices (ZNZ18 +0-035) are up +3.5 ticks.

China said it will cut import tariffs on 1,585 kinds of goods from Nov 1 and lower the overall tariff rate on the goods to 7.5% from 9.8%.

UK Sep CBI retailing reported sales fell -6 to 23, stronger than expectations of -10 to 19.

Japan Aug machine tool orders were revised downward to +5.1% y/y from the previously reported +5.3% y/y, the slowest pace of increase in 19 months.

U.S. Stock Preview

Key U.S. news today includes: (1) weekly MBA mortgage applications (previous +1.6% to 342.7 with the purchase sub-index up +0.3% to 234.2 and the refi sub-index+3.7% to 917.1), (2) Aug new home sales (expected +0.5% to 630,000, Jul -1.7% to 627,000), (3) EIA weekly Petroleum Status Report, (4) FOMC announces interest rate decision (expected +25 bp increase in fed funds target range to 2.00%-2.25%), (5) Fed Chair Jerome Powell holds press conference following FOMC meeting.