Singapore Markets closed

Top 5 Things to Know in the Market on Wednesday

5 key factors for the markets on Wednesday

Investing.com - Here are the top five things you need to know in financial markets on Wednesday, October 18:

1. Dollar moves higher ahead of Fed references, data

The dollar remained supported against a basket of the other major currencies on Wednesday as investors looked ahead to appearances from Federal Reserve policymakers.

New York Fed president William Dudley and Dallas Fed chief Robert Kaplan will be participate in a conversation on economic growth at 8:00AM ET (12:00GMT) with participants watching for any hints on the future of monetary policy.

Markets currently price in the odds for a rate hike at the December meeting at 93%, according to Investing.com’s Fed Rate Monitor Tool.

Traders were also keeping watch over developments regarding U.S. President Donald Trump’s pick for Fed chair. The dollar has been buoyed in recent sessions by speculation that Trump could pick a more hawkish candidate than Yellen, whose term is due to end in February.

Focus will also be on the release of the Fed’s Beige Book at 2:00PM ET (18:00GMT) which gives an indication of the economic situation in each of the 12 Federal Reserve districts, along with housing starts and building permits out at 8:30AM ET (12:30GMT).

At 6:03AM ET (10:03GMT), the U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, gained 0.22% to 93.57.

2. Earnings in spotlight

After earnings from Dow components helped support stocks a day earlier, the focus on quarterly reports will continue to garner the market’s attention on Wednesday.

American Express (NYSE:AXP) will be the big player from the blue-chip index when the credit card company reports earnings after the market close along with closely watched figures from the likes of eBay (NASDAQ:EBAY), United Continental (NYSE:UAL) or former Dow component Alcoa (NYSE:AA).

Before Wednesday’s opening bell, US Bancorp (NYSE:USB) and Abbot Labs (NYSE:ABT) are among companies releasing earnings.

With the third quarter earnings season still in the early stages, 82% of the 45 S&P firms reporting so far have beat consensus on profit while 73% have topped estimates on sales, according to The Earnings Scout.

3. Global stocks track higher as earnings roll in

U.S. futures pointed to a continuation of gains with the Dow set to take another shot at the 23,000 point level breached a day earlier when the S&P 500 closed at record highs, while traders brace for another round of earnings. At 6:04AM ET (10:04GMT), the blue-chip Dow futures rose by 50 points, or 0.22%, S&P 500 futures gained 3 points, or 0.11%, while the Nasdaq 100 futures advanced 5 points, or 0.08%.

Elsewhere, European stocks moved higher on Wednesday as investors digested a string of earnings, though Spanish equities were in the red as the country braced for a Thursday deadline for the Catalonian president Carles Puigedemont to clarify whether his region has officially declared independence.

Asian equities consolidated gains on Wednesday as Chinese President Xi Jinping laid out his road map to support the world’s second largest economy. Japan’s Nikkei and China’s Shanghai Composite both ended about 0.2% higher.

4. Oil moves towards 3-week highs ahead of inventory data

Oil prices pushed towards three-week highs on Wednesday amid tensions in the Middle East and while investors looked ahead to U.S. crude inventory data.

Traders speculated that fighting in Iraq and mounting tensions between the United States and Iran could affect supplies.

Late Tuesday, the American Petroleum Institute said that U.S. oil inventories declined by 7.1 million barrels in the week ended October 13, while investors awaited the official government data out at 10:30AM ET (14:30GMT) amid expectations for a draw of 4.2 million barrels.

U.S. crude oil futures gained 0.33% $52.05 at 6:05AM ET (10:05GMT), while Brent oil traded up 0.73% to $58.30.

5. Chinese President Xi lays foundation for continued growth

Chinese President Xi Jinping laid out a roadmap for the world’s second largest economy in what he termed would be a “new era” with China more open to the rest of the world.

"Through a long period of hard work, socialism with Chinese characteristics has entered a new era, this is a new historical direction in our country's development," Xi said.

On the economic front, the Chinese leader promised to relax market access for foreign investment, expand access to its services sector and deepen market-oriented reform of its exchange rate and financial system, while at the same time strengthening state firms.

Related Articles

Top 5 Things to Know in the Market on Wednesday

Germany's top court rejects fresh challenge to ECB powers

Low ECB rates an opportunity to reform, Draghi argues