The stock markets in the United States gained today after the Federal Reserve decided to maintain its existing interest rates, and will consider tightening during its next meeting in December.
According to the Federal Open Markets Committee (FOMC), the “current 0 to ¼ percent target range for the federal funds rate remains appropriate” to continue the progress towards a maximum employment and price stability.
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The FMOC also stated that the U.S. economy is growing at a “moderate pace.” The housing market improved further; the unemployment rate remained steady although the job gains slowed. The inflation rate is still below the central bank’s long-term target.
“When the Committee decides to begin to remove policy accommodation, it will take a balanced approach consistent with its longer-run goals of maximum employment and inflation of 2 percent,” according to the FOMC.
In an interview with Bloomberg, Russ Koesterich, a global chief investment strategist at BlackRock, commented, “The impression the Fed left is that December is still on the table, they didn’t close the door to that. You’re going to see some change of positions here; the main takeaway is the Fed is managing their optionality, and if we get a few good economic data points, then December is possible.”
Yesterday, the Department of Commerce reported that the orders for business equipment declined by 0.3% in September. The demand for all durable goods dropped 1.2% last month.
The Conference Board’s Consumer Confidence index declined to 97.6 in October. The S&P/Case-Schiller index of property values increased 5.1%, and the prices of homes in 20 U.S. cities rose at a faster pace in the year ended August.
- Dow Jones Industrial Average (DJIA) – 17, 778.95 (+1.12%)
- S&P 500- 2,090.28 (+1.18%)
- NASDAQ- 5,095.69 (+1.30%)
- Russell 2000- 1,175.11 (+2.60%)
- EURO STOXX 50 Price EUR- 3,421.09 (+1.19%)
- FTSE 100 Index- 6,437.80 (+1.14%)
- Deutsche Borse AG German Stock Index DAX- 10,831.96 (+139.77%)
- Nikkei 225- 18,903.02 (+0.67%)
- Hong Kong Hang Seng Index- 22,956.57 (-0.80%)
- Shanghai Shenzhen CSI 300 Index- 3,524.92 (-1.89%)
Stocks in Focus
The stock price of L-3 Communications Holdings climbed more than 9% to $125.59 per share. The company is scheduled to report its third-quarter financial performance tomorrow. Analysts expected L-3 Communications to report adjusted earnings of $1.81 per share o $2.91 billion in revenue.
Boston Scientific gained more than 9% to $18.40 per share. The company reported that its adjusted earnings increased 23% to $0.16 per share for the third quarter. Its revenue rose 2.3% to $1.88 billion.
The shares of Akamai Technologies declined more than 16% to $62.91 each. The company reported strong results for the third quarter, but its guidance disappoints investors.
Akamai posted adjusted earnings of $0.62 per share on $551 million in revenue. Analysts expected the company to report adjusted earnings of $0.58 per share on $550 million in revenue.
For the fourth quarter, Akamai expected to deliver earnings of 0.62 per share on $567 million in revenue. Analysts expected the company to report earnings of $0.65 per share in $597 million in revenue.