US stocks fluctuate before Fed rate decision, Treasuries gain

Bloomberg

US equity-index futures drifted alongside stocks in Europe on Wednesday while Asian shares were mixed as markets largely entered a holding pattern in the countdown to the Federal Reserve’s policy decision. Treasuries reversed a small gain and the dollar erased a decline as growth data for the world’s largest economy beat expectations.
Contracts on all three main American equity gauges fluctuated after the S&P 500 slipped from a record. The Stoxx Europe 600 Index drifted as banks weighed on the gauge, with Banco Santander SA also pulling down Spain’s benchmark index after earnings.
Automakers jumped in the wake of PSA Group and Fiat Chrysler Automobiles NV saying they’re in talks about a tie-up. Shares gained in Tokyo but retreated in Hong Kong, Shanghai, Seoul and Sydney.
The euro was steady after data showed France’s economy grew more than expected in the third quarter, but economic confidence in the broader region extended a slide. Oil fluctuated and gold rose.
General Electric Co raised its 2019 cash-flow forecast for the second consecutive quarter. GlaxoSmithKline Plc raised its 2019 earnings forecast again as surging vaccine sales helped offset increased competition for Advair, its fading asthma drug.
Total’s third-quarter profit beat analyst estimates and cash flow held firm. Airbus cut its full-year delivery target and said cash flow will be lower than expected.
Deutsche Bank saw earnings from trading debt securities and currencies drop 13%, compared with gains at all big Wall Street peers. Revenue from its remaining businesses fell 4%.
Credit Suisse Group posted better-than-expected top line growth and profit. Standard Chartered generated 19% more revenue in Europe and the Americas in the third quarter.
Volkswagen lowered its outlook for vehicle deliveries this year on a faster-than-expected decline in auto markets around the world. Sony boosted its profit outlook for the year.
The Fed was widely expected to lower rates on Wednesday for a third time this year. For investors, the tone of Chairman Jerome Powell’s press conference was expected to be key, as they try to ascertain the trajectory of policy heading into 2020. The macro picture is confusing: Trade tensions remain unresolved, economic indicators have been mixed but earnings season was better than expected and US stocks climbed to a fresh record this week.
“I don’t think we should fear a hawkish cut, but I do think one of the things to keep in mind, relative to the prior cut periods, is the Fed starting from a much lower rate,” Carol Schleif, deputy chief investment officer at Abbot Downing Investment Advisors, told Bloomberg TV.
The Fed’s preferred inflation metric, the core PCE deflator, is due on Thursday. The Bank of Japan sets policy on Thursday and Governor Haruhiko Kuroda will hold a news conference. Friday brings the monthly US non-farm payrolls report.
Futures on the S&P 500 Index advanced 0.1% in New York. The Stoxx Europe 600 Index was little changed. The UK‘s FTSE 100 Index was little changed. The MSCI Asia Pacific Index declined 0.2%. The MSCI Emerging Market Index fell 0.3%. The Bloomberg Dollar Spot Index was little changed. The euro fell 0.1% to $1.1104. The British pound climbed 0.2% to $1.2893. The Japanese yen was little changed at 108.93 per dollar.
The yield on 10-year Treasuries advanced one basis point to 1.85%. Germany’s 10-year yield dipped one basis point to -0.36%.