Investing.com - Here are the top five things you need to know in financial markets on Thursday, November 8:
1. Fed Policy Statement
The Federal Reserve will announce its latest policy decision at 2:00PM ET (1900GMT) and release its accompanying rate statement at the same time. No press conference is scheduled.
While no change in policy is expected, investors will be looking for fresh signals from the U.S. central bank on its plans for the rest of the year and beyond.
The Fed is likely to indicate that solid economic growth combined with rising inflation will keep it on track for a rate hike in December, despite mounting verbal pressure from the White House.
The Fed raised borrowing costs in September for the third time this year.
Fed fund futures currently price in an increase at the end-of-the-year meeting at a probability of around 80%, according to Investing.com’s Fed Rate Monitor Tool.
Besides the Fed, the economic calendar will be fairly light on Thursday, with just the weekly jobless claims report on tap at 8:30AM ET (1330GMT).
2. U.S. Futures Point to Pullback
U.S. stock futures pointed to a lower open, as investors took in the U.S. midterm election results, and turned their focus to the Fed's monetary tightening path.
At 5:30AM ET (1030GMT), the blue-chip Dow futures were down 65 points, or about 0.25%, the S&P 500 futures dipped 11 points, or around 0.4%, while the tech-heavy Nasdaq 100 futures indicated a loss of 45 points, or roughly 0.6%.
Wall Street rallied on Wednesday, with the Dow and S&P 500 recording their best post-midterm elections rally since 1982.
Elsewhere, shares in Europe traded modestly higher, as strong results from Societe Generale (PA:SOGN) and Commerzbank (DE:CBKG) soothed concerns about slowing corporate earnings.
Earlier, stocks in Asia were mostly higher, with the exception of mainland China.
3. Disney Earnings
Dozens of companies are expected to release earnings today in one of the last big waves of the earnings season.
Most of the focus will fall on Disney (NYSE:DIS), which reports after the close. The media giant is expected to report adjusted earnings per share of $1.33 on revenue of $13.72 billion, according to estimates.
Investors will be closely watching the results to see whether its growing efforts to take on Netflix (NASDAQ:NFLX) in the streaming space are starting to pay off.
Other high-profile names releasing quarterly results today include, DR Horton (NYSE:DHI), Discovery (NASDAQ:DISCA), Cardinal Health (NYSE:CAH), Crocs (NASDAQ:CROX), and Plug Power (NASDAQ:PLUG), which are all set to report during pre-market hours.
Joining Disney after the bell will be results from Yelp (NYSE:YELP), Dropbox (NASDAQ:DBX), Trade Desk (NASDAQ:TTD), Activision Blizzard (NASDAQ:ATVI), Hertz (NYSE:HTZ), and AMC Entertainment (NYSE:AMC).
4. Dollar, U.S. Bond Yields Edge Higher
Away from equities, the dollar edged higher against a currency basket and bond yields rose, as focus shifted away from politics to the Fed's monetary policy.
The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, was up 0.3% to 96.09, pulling away from 2-1/2-week lows hit in the previous session.
In the bond market, U.S. Treasury prices edged lower, pushing yields higher across the curve, with the benchmark 10-year yield inching up to 3.22%, while the 2-year yield rose to 2.95%, around levels not seen since 2008.
While a divided Congress will make it harder for President Donald Trump to push through new legislation, there is already talk of bipartisan cooperation on infrastructure spending, which would add more to the deficit, pushing yields even higher.
5. China's Exports Smash Expectations in October
China reported much stronger-than-expected exports for October, as shippers racing to beat higher tariff rates due to kick in at the start of next year rushed goods to the U.S.
China's exports rose 15.6% last month from a year earlier, customs data showed, picking up from September's 14.5% and beating analysts' forecasts for a modest slowdown to 11%.
Import growth also defied forecasts for a slowdown, suggesting Beijing's growth-boosting measures to support the cooling economy may be slowly starting to make themselves felt.
Imports for October quickened to 21.4% from 14.3% in September, beating analysts' forecasts for a slight cooling to 14%.