Tension as traders wait for decisions from the Fed and BOJ

Traders have been keeping their eyes on the stock market ahead of the policy meeting by the Federal Reserve and the Bank of Japan. There has been a rise in stocks futures as the members of the Fed Committee assemble for their highly awaited meeting this week.

The Federal Reserve System is the central bank of United States and it takes up the role of stabilising the monetary system and making it safer and more flexible. On Monday, stocks turned lower on as tension peaked over the Federal Reserve’s meeting starting on this week. Apple fell 1.3 percent recoiling for the second period in a row after reaping more than 12 percent just before the launch of the latest iPhone; iPhone 7.

There was no much movement in the market; tech-rich Nasdaq Composite Index lost 0.2 percent, S&P 500 stayed flat and the Dow Jones Industrial Average finished low at 18, 120.17. Sarepta Therapeutics and General Motors surged about 90 percent and 2.4 percent respectively.

McDonald’s struggled to keep away from the recent back tax charges from the European Union. There is a possibility of the fast food giant facing a $500 million amount in back taxes.

Twitter saw a 3.9 fall percent as Wells Fargo took a 1.3 percent jump, which was a leap following a fall in the bank’s shares due to the lawsuit against them for opening 2 million fake accounts without the customer’s’ consent or knowledge for the purpose of reaching its sales goals.

The rise in Wells Fargo came before CEO John Stumpf’s testimony to the Senate Banking Committee. In addition to the apology from the bank’s boss, there is an expectation for their sales targets to be eliminated early next year.

Crude prices also increased on Monday following a release by Venezuela’s president. He said that the agreement between the Organization of Petroleum –Exporting Countries and non-OPEC nations to stifle output was almost.

European stocks turned the loss-tables and traded higher on Tuesday. STOXX 600 jumped up to around 0.18 percent as Bayer enjoyed a positive position after reporting that it expects higher earnings which helped DAX go up 0.50 percent.

On Tuesday, gold went up for the second time in a row. U.S gold futures was flat at $1.317.60 percent as Spot gold rose to $1,314.30. According to analysts, the $1300 an ounce level of gold could be effortlessly broken if the Fed reveals a hike of rates. U.K supermarkets were on the radar after the industry’s data depicted Tesco’s market share falling in the 12 weeks until September 11.

GSK, shares of the pharmaceuticals company went down after Emma Walmsley got appointed as the new chief executive officer to replace current c.e.o Andrew Witty in 2017, when he retires. Kingfisher shares were higher in the morning after recording a rise in pre-tax profit but the gains were reversed later.

The Bank of Japan which is also starting its policy meeting is causing anxiety about what it will announce with predictions of it reducing interest rates. The mega financial institution has promised a thorough evaluation of its present quantitative easing.

Asians traders slowed down, possibly waiting for the BOJ’s make decisions on their monetary policies. Generally, the voiced opinions of Fed officials and release of economic data and analysis in previous weeks have caused rattles in the market over how the rates will move this month. Confidence in the U.S economy has been sabotaged by the inflation data for the month of August.

Although Governor Brainnard expressed a ‘dovish’ attitude, there are prospects of a hawkish turn as the FOMC prepares the market for a possible hike later in the year. Most analysts are predicting 45 percent chances of a rate increase in December. While traders are focused on the ongoing big event, it is important to be ready for what may happen after the meeting is done. That is, knowing which stocks will go up once they the Fed releases a statement on Wednesday.

Stocks are still bouncing in the market. Visit a reliable online brokerage firm like CMC Markets to stay updated with the current stock quotes