fairly uninspiring set of Federal Reserve minutes which added little to the debate on the timing of a Fed rate hike left US stocks off their fresh record highs on Wednesday. A lower open is expected on Thursday ahead of housing data that could breathe new life into a stuttering second-quarter economic recovery.
Moving on from the minutes, a more current assessment of the Fed’s position re the US economy may be gleaned from speeches by Vice Chair Stanley Fishcher today and Chair Janet Yellen on Friday. Both are likely to acknowledge the slowdown in the first part of Q2 but the key will be whether they waiver on the viewpoint that the first quarter weakness was “transitory” or a precursor to a more prolonged slowdown.
Shares in six of the world’s biggest banks were mostly higher on Wednesday following a huge settlement with US and UK regulators over FX market rigging. Shares were supported by the settlements being below what had been expected as well as hopes that the settlement comes close to drawing a line under the affair.
There was a mixed performance from the three European banks involved on Thursday, with Barclays higher despite receiving the largest fine while RBS and UBS were both trading lower, suggesting a similar pattern for JP Morgan and Citigroup. The concern is that there may be some civil lawsuits to follow and that because Barclays, JPMorgan Chase, Citigroup and the Royal Bank of Scotland all pleaded guilty to US Justice Department charges, the penalties could be much harsher on any future prosecutions.
Retailers Dollar Tree and Best Buy report earnings on Thursday before the open with fellow retailer Gap and tech giant Hewlett Packard reporting after the closing bell.
Futures suggest the:
will open 5 points lower at 2,120 with the
expected to open 34 points lower at 18,251 and the
14 points lower at 4,491.
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