S&P futures are set for a higher open (+ 0.1%) despite the expected hit to the Dow from Nike which is down over 3% on unexpectedly poor revenue growth, as European stocks gain while Asian shares dropped. Like yesterday when the big story was the jump in the USD ahead of Yellen's (rather hawkish) speech, so today the greenback's levitation has continued, this time propelled by today's unveiling of Trump's tax plan.
European stocks rose as the euro tumbled following Germany’s election result which was dubbed a "Nightmare Victory" for Merkel and could lead to potentially complicated coalition talks and perhaps even another early election. U.S. equity-index futures point to a lower open, while Asian equities slide after a plunge in Chinese property developer names over worries of new real estate curbs as well as tech stocks following more iPhone delivery concerns. S&P500 futures are steady, down slightly by just over -0.1%, after closing little changed on Friday.
One day after the much anticipated Fed announcement in which Yellen unveiled the "Great Unwinding" of a decade of aggressive stimulus, it has been a mostly quiet session as the Fed's intentions had been widely telegraphed (besides the December rate hike which now appears assured), despite a spate of other central bank announcements, most notably out of Japan and Norway, both of which kept policy unchanged as expected.
The day has finally arrived: today the Fed will officially announce the start of its balance sheet shrinkage (full preview here) while keeping rates unchanged, perhaps hiking again in December (market odds at 56%), while revising its economic projections and "dots", most likely in a lower direction.
S&P futures are little changed as the Fed begins its two-day FOMC meeting pushing the VIX below 10, down 1.3% and falling for the 7th day; European shares are lower as is the dollar while Japanese stocks soar on the back of a tumbling yen as a snap election in Japan now appears imminent. Despite the cautious action ahead of the Fed, the The MSCI All-Country World Index rose 0.1% to a new record high.