US futures signal lower open on Fed mixed messages; Macy's jumps on earnings
U.S. stock index futures pointed to a lower open on Wall Street on Wednesday as investors digested mixed signals over the policy direction of the U.S. Federal Reserve from its officials.
Macy's shares jumped in pre-market trading after the retailer reported third-quarter earnings and revenue that surpassed forecasts. Starbucks fell after the coffee chain revised its fourth-quarter results to show a loss following a court ruling Tuesday that awarded Kraft nearly $2.8 billion dollars. The money goes to Mondelez International, the grocery business that spun off last year, taking the Kraft name with it.
The U.S. dollar slipped against other global currencies and the yield on the 10-year Treasury note, used in figuring mortgages and other consumer loans, also declined, down 4 basis points at 2.74 percent.
On Wednesday, a speech on the history of the Fed by its chairman, Ben Bernanke (due to be broadcast via the web at 7 p.m. Eastern), will be watched for further hints on the direction of monetary policy. This comes after two of his colleagues gave contrasting opinions on the future of the Fed's stimulus program and when it would be reduced, or "tapered."
On Tuesday, Atlanta Federal Reserve President Dennis Lockhart said in speech on the economy that the "encouraging" October jobs report would not fundamentally change the equation used to decide whether to reduce the pace of their asset purchases. Elsewhere, Minneapolis Fed President Narayana Kocherlakota said in a speech on Tuesday that with weak inflation "there is no reason to be afraid of monetary stimulus."
Their comments follow those of Dallas Fed President Richard Fisher who told CNBC on Tuesday that "tapering could not go on forever".
Following the cue set by Wall Street, which closed lower on Tuesday, Asian and European equity markets were down Wednesday morning.
U.S. Treasury Secretary Jack Lew told CNBC on Wednesday that he was optimistic about the pace of growth in the U.S. and stressed that the world cannot rely on the U.S. to support the global economy.
The Cleveland Fed's President, Sandra Pianalto, speaks at an event in Philadelphia on Wednesday and investors will also be looking ahead to Thursday when Vice Chairman Janet Yellen will testify before the Senate Banking Committee during her confirmation hearing for further clues on her economic direction.
Other data and events on Wednesday include mortgage applications, a 10-year Treasury note auction and the second meeting of a bi-partisan budget committee created as a part of the most recent debt limit/government shutdown deal.