Wall Street Edgy At Start Of Fed Decision Week

(RTTNews) - Early indications suggest that Wall Street stocks may open Monday's session on a nervous note on a data heavy week, which also encompasses the FOMC announcement. Divided opinions about the timing of the first Fed rate hike in the current cycle and a lack of any major economic data could render the mood cautious. The dollar is mostly lower and commodity prices are also subdued. While Asian stocks ended mixed for the session amid a slew of economic data from China that painted an economic picture that is far from being healthy, the European markets are gaining ground.

At 6:15 am ET, the Dow futures are rising 26 points, the S&P 500 futures are adding 5 points and the Nasdaq 100 futures are gaining 10.75 points.

U.S. stocks reversed course and advanced solidly in the holiday-shortened week ended September 11th, as lack of much gyrations in the Chinese equity markets and mixed expectations concerning a potential September rate hike triggered buying.

Markets world over are likely to be focused one main economic event of the week, namely the 2-day FOMC meeting starting on Wednesday. With the markets putting the odds of a September rate hike as roughly between 20 and 30 percent, Thursday's FOMC statement, updated Fed forecasts and the Chair's press briefing could be the closely watched event of the week.

Some of the other noteworthy releases of the week include the Commerce Department's retail sales report for August, the Federal Reserve's industrial production report for August, the results of the New York Federal Reserve and the Philadelphia Federal Reserve's regional manufacturing surveys for September and the Labor Department's consumer price inflation report for August.

The weekly jobless claims report, the National Association of Home Builders' housing market index for September and the Commerce Department's housing starts report for August are also among the first-tier data releases of the week. The Commerce Department's business inventories data for July, the Commerce Department's second quarter current account data, the Conference Board's leading economic indicators index for August and announcements concerning the Treasury auctions of 2-year, 5-year and 7-year notes round up the economic events of the week.

In corporate news, JetBlue (JBLU) reported that its traffic rose 6.7 percent year-over-year in August and capacity climbed 8.3 percent. The load factor fell 1.3 percentage points to 87 percent.

The major Asian markets ended mixed, with the Chinese and Japanese markets retreating notably. The South Korean market also moved to the downside. On the other hand, the rest of the markets advanced amid hopes that some soft Chinese data released over the weekend has provided additional reasons for stimulus infusion.

The Japanese market succumbed to the weakness generated by a firmer yen. At the close of trading, the Nikkei 225 index was down 298.52 points or 1.63 percent at 17,966. China's Shanghai Composite Index plunged 85.44 points or 2.67 percent before ending at 3,115.

At the same time, Australia's All Ordinaries held mostly above the unchanged line amid volatility before ending 24.20 points or 0.47 percent higher at 5,121. Hong Kong's Hang Seng Index closed at 21,561, up 57.53 points or 0.27 percent.

On the economic front, a trio of reports release by the Chinese National Bureau of Statistics on Sunday showed the questionable nature of the recovery. Industrial production rose 6.1 percent year-over-year in August, faster than the 6 percent rate in July, but slower than the 6.3 percent growth expected by economists.

Fixed asset investment climbed 10.9 percent year-over-year in the January to August period, slower than the 11.2 percent growth expected by economists. Meanwhile, retail sales rose at a faster than expected rate of 10.8 percent.

Revised estimate released by the Ministry of Economy, Trade and Industry showed that industrial production fell 0.8 percent month-over-month in July, downwardly revised from the 0.6 percent drop estimated initially. Shipments also fell a steeper than initially estimated 0.4 percent. Annually, output remained unchanged following a 2.3 percent increase in June.

A separate report showed that the tertiary index, that reflects performance by the service sector, rose 0.2 percent in July following a 0.3 percent increase in the previous month.

European markets opened higher and rallied sharply in early trading, as sentiment was buoyed by Chinese stimulus hopes. Since then, the buoyancy has tempered, reflecting the cautious underlying mood ahead of the Thursday's FOMC announcement.

In corporate news, French insurer AXA announced the acquisition of an 18.6 percent stake in West African utility company Eranove from French conglomerate Bouygues. Reports suggest that Shire is contemplating to sweeten its $30 billion bid for U.S.-based Baxalta (BXLT), a spin-off unit of Baxter (BAX).

On the economic front, eurozone industrial production grew a more-than-expected 0.6 percent month-over-month in July, marking the biggest gain in five months, provisional data from Eurostat showed. Economists had expected a 0.3 percent gain. Annually, industrial production grew 1.9 percent in July, more than the 0.6 percent growth expected by economists and marking the strongest since March.