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S&P 500 Futures Slide in Anticipation of FOMC Meeting; Focus on U.S. Housing Data

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S&P 500 E-Mini Futures Down as Markets Await the Fed’s Verdict

June S&P 500 E-Mini futures (ESM24) are trending down -0.30% this morning as investors awaited the start of the Federal Reserve’s two-day policy meeting while also gearing up for the release of fresh data on the U.S. housing market.

Market Performance Highlights from Last Session

In Monday’s trading session, Wall Street’s major indexes closed higher. Tesla Inc (TSLA) climbed over +6% and was the top percentage gainer on the S&P 500 and Nasdaq 100 after the electric carmaker said it would raise prices for all Model Y cars in the United States by $1,000 starting April 1st.

The Focus on the Federal Reserve’s Meeting

The Federal Reserve kicks off its two-day meeting later in the day, with investors widely expecting the U.S. central bank to hold interest rates steady on Wednesday for the fifth straight gathering.

Expectations on Interest Rates and Economic Data

Meanwhile, U.S. rate futures have priced in an 8.6% chance of a 25 basis point rate cut at the May FOMC meeting and a 50.7% probability of a 25 basis point rate cut at June’s policy meeting.

Insight into Market Trends and Future Directions

On the economic data front, investors will likely focus on the U.S. Building Permits preliminary data in a couple of hours. Economists foresee this figure to stand at 1.500M in February, compared to the previous figure of 1.489M. U.S. Housing Starts data will be reported today as well. Economists expect February’s figure to be 1.430M, compared to the previous value of 1.331M.

European Market Movements and Regulatory Insights

The Euro Stoxx 50 futures are up +0.10% this morning as investors digested key Eurozone economic data and looked ahead to the start of the Federal Reserve’s meeting. Energy stocks outperformed on Tuesday, while financial services and technology stocks lost ground.

Global Market Overview and Asian Stock Movement

Asian stock markets today closed mixed. China’s Shanghai Composite Index (SHCOMP) closed down -0.72% and Japan’s Nikkei 225 Stock Index (NIK) closed up +0.66%.

Concern Over China’s Property Crisis Impact on Stock Market

China’s Shanghai Composite Index closed lower today, snapping two straight sessions of gains amid subdued sentiment on concerns over the country’s worsening property crisis.

Japan’s Nikkei 225 Rises After BOJ’s Policy Shift: Market Update

The BOJ’s Bold Move: Japan’s Nikkei 225 Rises in Response

The BOJ’s Policy Shift Influences Market Sentiment

Japan’s Nikkei 225 Stock Index closed higher today following the Bank of Japan’s decision to end its negative interest rate policy, signaling a new era of stable inflation on the horizon. Real estate stocks spearheaded the surge on Tuesday. The BOJ made a historic move by terminating over a decade’s worth of ultra-loose monetary policy. Scrapping the world’s last negative interest rate, the central bank introduced a new policy rate range of 0% to 0.1%, shifting from a -0.1% short-term interest rate. Amid these changes, the BOJ abandoned its yield curve control program while committing to the continuous purchase of long-term government bonds. Furthermore, it ceased its ETF purchases. The yen depreciated, and Japanese government bond yields decreased following the BOJ’s decision to hike borrowing costs for the first time since 2007.

Reflecting on this monumental decision, Charu Chanana, a strategist at Saxo Capital Markets, noted, “A well-flagged decision from the BOJ helped avoid turmoil in financial markets and reflects the power of strong communication. The BOJ’s commentary suggests that it expects accommodative conditions to persist for some time, which is a signal that concurrent rate rises are unlikely.”

Industrial Sector Data and Market Reactions

On Tuesday, data was released revealing Japan’s industrial output shrank by 6.7% compared to the previous month in January. Although this decline was less severe than the initial 7.5% projection, it still represents the most significant drop since May 2020. The Nikkei Volatility, gauging the implied volatility of Nikkei 225 options, ended the day down -3.61% at 19.50.

Pre-Market Activities and Stock Movement

Fusion Pharmaceuticals Inc (FUSN) skyrocketed around +94% in pre-market trading subsequent to AstraZeneca’s agreement to acquire the clinical-stage biopharmaceutical company for up to $2.4 billion. Augmedix (AUGX) surged over +15% in pre-market transactions following better-than-expected Q4 results. National CineMedia Inc (NCMI) saw a leap of more than +21% in pre-market trading after reporting upbeat Q4 results, offering robust Q1 revenue guidance, and initiating a share buyback program worth up to $100 million. Additionally, 3M Company (MMM) enjoyed a pre-market gain of about +1% after Barclays upgraded the stock.

Conversely, Snowflake Inc (SNOW) experienced a decline of over -1% in pre-market trading as Redburn Atlantic downgraded the stock. This change in rating led to a $125 price target for SNOW.

You can find more pre-market stock movers here

Earnings Spotlight for Today – March 19th

Companies in the U.S. spotlight for earnings on this day include ZTO Express Cayman (ZTO), Tencent Music Entertainment Group (TME), Xpeng (XPEV), Caleres (CAL), HUYA (HUYA), Terawulf (WULF), Taysha Gene (TSHA), Harrow Health (HROW), Citi Trends (CTRN), Relmada Therapeutics (RLMD), and Design Therapeutics (DSGN).

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On the date of publication, Oleksandr Pylypenko did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article are solely for informational purposes. For more information, please view the Barchart Disclosure Policy here.

The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.

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