US markets fell under their own weight on Monday essentially tracking the direction of oil prices. After a brief spell in positive territory, oil prices hit a wall of selling building on losses felt after United Arab Emirates energy minister referred to OPEC inaction even at $40 per barrel. Oil prices are still crashing but US markets are looking towards a higher open on glimmers of hope from improvements in the outlook for European manufacturing and services ahead of US housing and manufacturing data. The risk to US markets now is that slow global growth catches up with them. The S&P 500 is still up over 8% for the year but large numbers of global indices are now in negative territory. The notable exception to the global slump in equities in 2014 are Chinese and Japanese stock markets which are rallying thanks to increasing central bank stimulus. The Fed begin their two-day meeting on Tuesday and markets will eagerly await whether the Fed is closer to lifting off from its zero-bound interest rate policy and large balance sheet. Further signs that the Fed is moving from loose to tight monetary policy will be the deciding factor as to whether US markets follow China and Japan higher or the rest of the world lower. Comments from the Fed’s James Bullard on October 16th that the Fed should continue QE just before the program was scheduled to end prompted the undoing of a 10% correction in US markets and a series of new highs in the Dow and S&P 500. If Bullard’s October comments are to be taken as a gauge of the Fed’s sensitivity towards markets it could be concluded the Fed will not want to rock the boat by removing the “considerable time” language from its statement while stocks markets are sharply retreating. If the Fed infers no rate-hike yet by keeping the “considerable time” language in its statement; that maybe enough to goad the Santa rally into year end. Google is facing increasing European headwinds, this time at the hands of a Dutch privacy watchdog looking to levy a €15bn euro fine. The fact is that Google do push the boundaries on privacy that will face increasing resistance from users and regulators, especially from cash-strapped European governments hampered by weak growth. If Microsoft’s difficulties at the hands of the EU are anything to go by, Google will face prolonged legal wrangles but should be able to come out ok the other side. The risk is that if enough of these fines crop up, that may be enough to knock down earnings growth from quarter to quarter enough to cause shorter term investors to sell-out. Futures suggest the: S&P 500 will open 9 points higher at 1,998 with the Dow Jones expected to open 71 points higher at 17,248 and the Nasdaq 17 points higher at 4,174. CMC Markets is an execution only provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.