US OPEN: Wall Street opens mixed ahead of FOMC rate decision

• Investors await FED’s monetary policy decision
• US Inflation rate lowest since 2015
• GameStop (GME.US) sales fell  17%

US indices opened  mixed on Wednesday as investors are waiting for the FOMC meeting that could provide more details on the central bank's view of the economy as it emerges from lockdowns. FED is expected to leave the target range for the federal funds rate unchanged at 0%-0.25%.  Today Fed policymakers will publish their first economic projections since December and  investors will look for any hints on yield curve control measures amid a recent surge in U.S. Treasury yields. Traders will also keep an eye on any new stimulus measures the Fed may be considering.

Today, investors have received another set of data from the United States. Annual inflation rate  fell to 0.1 % in last month of 2020 from 0.3 % in April and below analysts’ expectations of 0.2 %. It is the lowest reading  since September of 2015, mainly due to an 18.9 plunge in energy costs. Meanwhile US core consumer price inflation rate, which excludes volatile items such as food and energy, dropped to 1.2 % year-on-year in May 2020 from 1.4 % in the previous month and below consensus of 1.3 %. It is the lowest level since March 2011. US core consumer prices, which exclude volatile items such as food and energy, decreased 0.1 percent from a month earlier in May 2020. This was the first time the core index has ever declined in three consecutive months.

S&P 500 (US500) is still testing the 3218.3 resistance level we mentioned yesterday. In case a profit taking occurs and downward correction starts,  the support at 3159.7 pts could be at risk. On the other hand, breaking above the resistance at 3218.3 pts will invalidate the bearish scenario and the market may launch another upward impulse toward next resistance at 3400 pts. Source: xStation5

GameStop (GME.US) shares fell 6% in extended trading after the company posted its quarterly results. The video game retailer  lost $1.61 per share excluding some items with revenue of $1.02 billion, well above analysts’ forecasts  of $1.27 per share loss on revenue of $1.07 billion. Also company's store sales plunged 17% due to the coronavirus pandemic, however e-commerce sales soared 519% compared to the same quarter last year, according to a company statement.

GameStop (GME.US) price is testing the key resistance level at $4.90 per share which is additionally strengthened by 200 MA (red line). Should the current sentiment prevail, the upward move toward $6.23 per share may be on the cards. However breaking below the 200 moving-average will invalidate the bullish scenario. Source: xStation5

Five Below (FIVE.US) stock rose 10% in after-hours trading after the company reported its first-quarter earnings results. The retailer lost 91 cents per share on revenues of $ 200.9 million, while analysts had expected a loss of 34 cents per share on revenues of $ 230.6 million. The company did not provide further earnings guidance due to  the uncertainty caused by the pandemic but expects to add 100 to 120 net stores this year.

Starbucks (SBUX.US) announced it lost as much as $3.2 billion in revenue during its fiscal third quarter due to the coronavirus pandemic. Company also expects same-store sales in the U.S. and China to decline 10% to 20% for the full fiscal year.

AMC Entertainment (AMC.US) is planning to reopen theaters globally next month, with limited capacity and certain seats blocked off in order to comply with  safety measures. Company closed its theaters in March due to the  pandemic. AMC also announced that  Clorox (CLX.US) will sanitize its locations.