Global stocks flat as investors await Fed meeting outcome

AP News
Posted: Sep 20, 2017 7:59 AM
Global stocks flat as investors await Fed meeting outcome

LONDON (AP) — Global stock markets were little changed Wednesday as investors took to the sidelines ahead of the U.S. Federal Reserve's announcement of the results of its meeting.

KEEPING SCORE: In Europe, Germany's DAX was down 0.1 percent at 12,552 while the CAC 40 in France was steady at 5,240. The FTSE 100 index of leading British shares was stable at 7,272. Wall Street was poised for a similarly flat opening with Dow futures and the broader S&P 500 futures unchanged.

FED WATCH: At the end of its two-day meeting on Wednesday, the Federal Reserve is widely expected to announce it will begin to reduce its enormous bond portfolio, which reached $4.5 trillion. The move will gradually increase long-term borrowing rates. While the decision to shrink the Fed's balance sheet is much expected, when and how the Fed will manipulate its target for short-term interest rates is less clear. After leaving its benchmark rate at a record low for seven years after the 2008 crisis, the Fed has modestly raised the rate four times since December 2015 to a still-low range of 1 percent to 1.25 percent.

ANALYST TAKE: "Details on balance sheet reduction will be of interest, but crucially the committee will extend its rate outlook in 2020, and this could give us a good sense of the end-point for the interest rate in this current tightening cycle," said Chris Beauchamp, chief market analyst at IG.

WORLD ECONOMY: The Organisation for Economic Co-operation and Development maintained its global growth forecast for this year at 3.5 percent and next year's but lifted next year's to 3.7 percent. It also now thinks that the eurozone will grow by 2.1 percent this year, 0.3 percentage point more than its previous prediction in June. That means the OECD is expecting eurozone growth this year to match the U.S. rate, which it left unchanged. And next year, it's forecasting growth of 1.9 percent for the eurozone, 0.1 percentage point more than previously thought, but below its 2.4 percent projection for the U.S. The big three eurozone economies — Germany, France and Italy — all saw upward revisions.

ASIA'S DAY: Japan's Nikkei 225 added 0.1 percent to 20,310.46 and South Korea's Kospi edged down 0.2 percent to 2,412.20. Hong Kong's Hang Seng index added 0.4 percent to 28,127.80. China's Shanghai Composite Index gained 0.3 percent to 3,366.00. Australia's S&P/ASX 200 fell 0.1 percent to 5,709.10.

OIL: Benchmark U.S. crude rose 1.1 percent to $50 a barrel on the New York Mercantile Exchange while Brent crude, used to price international oils, advanced by the same rate to $55.77 per barrel in London.

CURRENCIES: The euro was up 0.1 percent at $1.20 while the dollar fell 0.2 percent to 111.31 yen.