Opening Bell: Stocks Waver On Heightened Trade Uncertainty Ahead Of Fed

• U.S. futures remain in holding pattern as heightened trade uncertainty prevails over interest rates decisions
• Hang Seng outperforms despite new setback for Carrie Lam government
• British pound slips as PM Johnson loses half of his poll lead

Key Events

Futures on the S&P 500, Dow and NASDAQ 100 and European shares ranged around neutral levels this morning, ahead of the Fed’s final monetary policy decision of the year and with a key trade tariff deadline only four days away.

With a Fed's stay on rates all but certain, it is most likely something else—trade uncertainty—that is keeping investors in a holding pattern. The same can be said for the ECB’s policy decision, coming up on Thursday, and for the U.K. general election—also on Thursday— which hasn’t seemed to be much of interest to stock traders either.

Amid endless back-and-fourths and conflicting reports on the state of U.S.-China negotiations, the next batch of U.S. tariffs—hitting consumers items, whose price variations would be felt immediately by citizens—hold the potential to drastically escalate the trade spat. In the background, U.S. President Donald Trump's reelection bid amid growing impeachment calls and a slowing economy for China are raising the stakes of a trade deal for both sides.

STOXX 600 Daily Chart

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Meanwhile, Europe's STOXX 600 failed to rebound, falling for the third straight day, as retail shares' losses erased miners’ gains. Technically, the benchmark is trading according to a possible top pattern.

Global Financial Affairs

Earlier in Asia, Hong Kong’s Hang Seng (+0.79%) outperformed, even after a panel of international experts, tasked with monitoring the objectivity of the local police watchdog in a probe over how recent civil protests have been handled, quit the inquiry due to a lack of agreement with the police supervisor. This was a major setback for Carrie Liam government, which has opposed the set up of an independent body to investigate alleged police abuses.

Shares also climbed on South Korea’s KOSPI (+0.36%) and China’s Shanghai Composite (+0.24%), while they dropped on Japan’s Nikkei 225 (-0.14%).

DXY Daily Chart

The dollar rose, as the pound slipped lower after British Prime Minister Boris Johnson lost more than half his poll lead ahead of Thursday's general elections. Technically, the greenback is ranging within a bearish pennant, after a five-straight day slide, which completed a small double top.

WTI Daily Chart

Oil edged lower after the American Petroleum Institute posted a surprise inventory build—though technically the price is setting up for another leg in the rally.

Up Ahead

• The Federal Reserve decides on interest rates on Wednesday, followed by a press briefing from Chairman Jerome Powell.
• The next European Central Bank policy decision is on Thursday.
• Also on Thursday, the U.K. holds a general election.

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