US OPEN: Wall Street set to open higher ahead of FOMC minutes

4:55 PM February 19, 2020

  • Wall Street set to open higher

  • FOMC minutes release at 7:00 pm GMT, Democratic debate at 2:00 am GMT (Thursday)

  • Boeing (BA.US) finds unidentified objects in fuel tanks of undelivered 737 MAX jets

US equity futures point to a strong open of the Wall Street session today. Futures on the Nasdaq index gain the most. Dow, S&P 500 and Russell 2000 experience gains of similar scale. The only macro release left scheduled for today is FOMC minutes (7:00 pm GMT). Apart from that, Democratic debate in Las Vegas will draw attention as well

FOMC minutes and Democratic debate

The two major events for the US day that has just begun will be FOMC minutes release and Democratic debate in Las Vegas. The former will take place at 7:00 pm GMT and is expected to offer more details on the latest monetary policy decision. Coronavirus-related comments are unlikely to offer much detail as the meeting took place on January 29 - just a week after markets started to take note of the outbreak. Democratic debate will take place at 2:00 am GMT. It will be an interesting event as it will be the first debate that features Michael Bloomberg.

Russell 2000 (US200) has once again pulled back from the price zone at 1700 pts. The index has been trading below this hurdle for almost a year and a half. Equity futures point to a strong open of the US session and in case the move will be continued during the day, another test of the aforementioned zone may be on the cards.  However, weakness of small-caps can be seen as a worrying sign as such companies generated the majority of their revenue at home. Having said that, poor performance of Russell 2000 may hint at poor performance of the overall US economy. Source: xStation5

According to a Reuters report, Shanghain has drawn up a list of companies that will be eligible for subsidized loans aimed at easing the impact of the coronavirus outbreak. List has been distributed to lenders in the city. The list has not been made public but according to bankers cited by Reuters it may include as many as 200 companies. One of the companies eligible for loans and mentioned in Reuters report is Dow Jones member - 3M (MMM.US).

Tim Hoettges, CEO of Deutsche Telekom, said that following completion of a merger between its subsidiary T-Mobile (TMUS.US) and Sprint (S.US), a company with 140 million customers will be created. Executive said that the company will have enough wireless spectrum to build the “best nationwide” 5G network. Having said that, the company could overtake AT&T and Verizon as US market leader and Tim Hoettges said it is the goal.

3M (MMM.US) took a hit from recent coronavirus concerns. The stock pulled back from the $180 area to below $160 handle. Share price is testing the lower limit of recent trading range at $158. Should a rebound occur, the attention will shift to the resistance at $165. Source: xStation5

Boeing (BA.US) informed its employees that it has found unidentified objects in fuel tanks of several undelivered 737 MAX jets. The company plans to inspect all undelivered 737 MAX jets for the presence of unidentified objects in fuel tanks. Boeing said that the issue will not affect planes’ return to service. US carriers do not expect planes to return to service for the majority of a summer travel season.

According to Bloomberg report, Intel (INTC.US) is in talks with MaxLinear, the US hardware company, over sale of one of its units. The unit being subject of talks manufactures chips for home internet access gear. Neither of the companies involved commented on the news.

Tesla (TSLA.US) makes another jump in pre-market. The stock is expected to open 7% higher.

Boeing (BA.US) still has not recovered from the drop caused by grounding of 737 MAX jets. Recent news does not hint at planes being allowed into the service anytime soon therefore longer-lasting recovery in share price may not come soon as well. The stock pulled back into the price zone ranging around $340 handle at the end of the previous week but managed to paint a bullish pin bar pattern yesterday. Source: xStation5

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