US OPEN: Wall Street gains ahead of Fed decision

• Investors awaiting FOMC policy announcement

• U.S. retail sales below expectations

• FedEx with excellent financial results

Wall Street opened higher on FOMC decision day. Despite rather disappointing U.S. retail sales data for the month of August, all major indices rose at the market open with industrials and energy leading early gains. U.S. retail sales rose 0.6% MoM in August while markets anticipated that it would advance 1.0% MoM. The gauge ex auto rose 0.7% (vs exp. 1.0%). It is worth mentioning that last month’s figures were revised lower.

Nevertheless investors seem to be focused on today’s FOMC decision as it is the main risk event of the day. The Fed will announce its interest rate decision at 7 pm BST. As markets do not expect any rates change, financial markets will definitely pay attention to Powell’s press conference (7:30 pm BST) as the Fed Chairman might refer to the latest monetary policy change including greater tolerance of inflation.

US500 successfully broke above $3,415 mark in the early hours of today’s European session. However, due to rather disappointing retail sales data, the index turned back and is currently testing the mentioned area. Should market bears push the price even lower, the 50-hour moving average (purple line) should provide some support. The 50% Fibo retracement of the recent sell-off remains key short-term resistance level. Source: xStation5

S&P 500 top movers at 2:38 pm BST. Source: Bloomberg

Apple (AAPL.US) unveiled a series of subscriptions bundles at an online event yesterday. The firm said that it will launch Apple One subscriptions which combine several services including Apple Music, Apple TV+ and iCloud storage. The event was widely awaited as investors hope that new approach will spur more growth in services revenue. Users will also benefit from the Apple One as the subscription is less expensive compared to buying each service individually. Apart from that, the company announced a new fitness subscription platform called Apple Fitness+ which works via its Apple Watch. 

Adobe (ADBE.US) reported EPS of $2.57 on revenue of $3.23 billion in the fiscal third quarter. Refinitiv consensus expected a profit of $2.41 per share on sales of $3.16 billion, therefore results topped analysts’ estimates. Sales of the company’s flagship creative offerings rose 19% to $1.96 billion. Adobe’s Document Cloud, which benefited from the pandemic, generated $375 million (increase of 22%). 

FedEx (FDX.US) surged 9% in pre-market as the firm’s Q1 adjusted EPS beat highest estimate. The company reported Q1 adjusted EPS of $4.87 while analysts pooled by Bloomberg expected a profit of $2.69 per share. Q1 revenue amounted to $19.3 billion (+13% YoY), analysts anticipated sales of $17.55 billion. The company did not provide an earnings forecast for fiscal 2021 due to coronavirus-related uncertainty. 

FedEx stock made an impressive recovery after coronavirus market sell-off. Shares gained roughly 175% and the price has been approaching its 2018 highs. As shares opened with huge bullish gap today, market bulls should expect some strong resistance near $255 area. However, due to excellent financial results further upward trend is by all means possible. Should buyers smash through $255 barrier, market would focus on all-time highs levels ($275 area). Source: xStation5