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Top 5 Things to Know in The Market on Wednesday

Investing.com - Here are the top five things you need to know in financial markets on Wednesday, March 20

1. Markets Await Fed Announcement, Powell

The Federal Reserve is not expected to take action on interest rates at the conclusion of its two-day policy meeting at 2:00PM ET (18:00 GMT), keeping the Fed funds rate in a range between 2.25%-2.5%.

Fed Chair Jerome Powell is due to hold a press conference half an hour after the release of the policy statement.

The U.S. central bank will also release new forecasts for economic growth and interest rates, known as the "dot-plot". The Fed's December projection implied two hikes this year, but the new one is widely expected to anticipate, at most, a single increase.

The Fed is also expected to lay out a plan to stop shrinking its $4 trillion balance sheet, or so-called quantitative tightening. Many policy makers have suggested the Fed is likely to conclude the process and stabilize its bond holdings by the end of this year.

The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, was at 95.95 by 5:35AM ET (10:35 GMT), not far from Tuesday's two-and-a-half-week low of 95.73.

In the bond market, U.S. Treasury prices inched higher, pushing yields slightly lower across the curve, with the benchmark 10-year yield slipping to 2.59%.

Read more: 3 Things To Watch For From Powell And Company: Kathy Lien

2. British PM May to Request Short Brexit Delay

The British pound remained hostage to headlines on Brexit.

Just 9 days before the March 29 exit date, British Prime Minister Theresa May will request a short delay to Brexit in a letter to European Council President Donald Tusk after her plan to hold a third vote on her deal was thrown into disarray by a surprise intervention from the speaker of parliament earlier this week.

But the ultimate length of the delay was unclear amid the political chaos in London.

May had earlier warned parliament that if it did not ratify her deal, she would ask to delay Brexit beyond June 30, a step that Brexit's advocates fear would endanger the entire divorce.

Sterling was down 0.35% at $1.3220, off its nine-month peak of $1.3380 hit a week ago.

3. Wall Street Set for Higher Open

U.S. stock index futures pointed to a slightly higher open, as investors looked ahead to a policy decision by the U.S. Federal Reserve which is expected to shed more light on its interest rate plans for the rest of the year.

Market players will also be watching for any important developments on the U.S.-China trade front, following reports that U.S. officials are concerned China is pushing back against American demands in trade talks.

The blue-chip Dow futures were up 24 points, or about 0.1%, the S&P 500 futures rose 3 points, or around 0.1%, while the tech-heavy Nasdaq 100 futures indicated a gain of 7 points, or roughly 0.1%.

Elsewhere, European shares retreated from near six-month highs, with German stocks leading losses as chemicals producer Bayer (DE:BAYGN) sank 12% following another U.S. court verdict on weed killer Roundup's link to cancer.

Also weighing on the DAX was BMW (DE:BMWG), down more than 4% after it issued a cautious profit outlook.

Earlier, markets in Asia held to tight ranges, but were broadly supported near 6-1/2-month highs. Japan's Nikkei climbed 0.2% while mainland Chinese shares were flat.

4. FedEx Set for Rough Day

Shares of FedEx (NYSE:FDX) were down more than 6% in pre-market trading following the release of the logistic company’s disappointing third-quarter earnings and weak full year outlook.

FedEx posted earnings per share of $3.03 on revenue of $17.01 billion after markets closed on Tuesday. Analysts polled by Investing.com estimated earnings per share of $3.14 on revenue of $17.62 billion.

The shipping giant, widely seen as a bellwether for the global economy, also slashed its full-year guidance for the second time in three months, citing slowing global trade.

Executives also blamed the results on the cost of launching year-round, six-days-per-week operations at FedEx Ground in the U.S. and continued weakness in its international Express business, which includes former Dutch delivery company TNT Express.

5. EIA Oil Supply Report

In commodities, the U.S. Energy Information Administration will release its official weekly oil supplies report for the week ended March 15 at 10:30AM ET (14:30 GMT).

Analysts expect the EIA to report a gain of around 0.3 million barrels in crude inventories, although the American Petroleum Institute said that U.S. crude stocks actually fell by 2.1 million barrels last week.

U.S. West Texas Intermediate crude futures were down 18 cents, or around 0.3%, at $59.11 a barrel. WTI hit a high of $59.57 a barrel on Tuesday, the highest since Nov. 12.

International Brent crude oil futures were at $67.62 per barrel, up 2 cents, or roughly 0.5%. Brent touched $68.20 a barrel on Tuesday, its highest since Nov. 16.

-- Reuters contributed to this report


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