Wednesday, September 21, 2016

Ahead of the much anticipated decision by the Federal Open Market Committee (FOMC) this afternoon about whether to raise interest rates, we find plenty of data for the mid-day markets to consume. Earnings results, company buybacks, and other industry data expected will keep investors busy until the 2pm ET Fed announcement.

After the bell yesterday, global logistics major FedEx (FDX Quick QuoteFDX - Free Report) beat earnings expectations on basically in-line revenues. FedEx also raises guidance for its fiscal year, sending the stock up 4% in pre-market trading.

General Mills (GIS Quick QuoteGIS - Free Report) also reported earnings during this in-between period of quarterly earnings seasons. The consumer staples mainstay also beat bottom-line expectations on in-line quarterly sales, but expressed that its industry’s slow start has hampered sales performance, and called macro-economic factors “challenging.”

Both Microsoft (MSFT Quick QuoteMSFT - Free Report) and Target (TGT Quick QuoteTGT - Free Report) have issued share repurchases and increased their dividend yields. Microsoft’s $40 billion share buyback follows an earlier $40 billion buyback the company said it is on-track to complete. Microsoft bumped up its dividend 8%. Target’s buyback is for $5 billion, following a $10 billion buyback from back in January 2012, and has brought its dividend to 60 cents per share.

Prior to the Fed announcement, we’ll hear from the U.S. Energy Department to release latest inventory data. This will give us a glimpse into the domestic supply glut, and what it means for oil prices. The WTI and Brent reads remain wallowing in the mid-$40s this morning. This report is due at 10:30am ET.

Fed Chair Janet Yellen will hold a news conference at 2:30pm ET, after the FOMC decision is released at the top of that hour. Most analysts continue to see the Fed holding at the current 0.25-0.50 rate, but many expect to see hawkish revisions to the rhetoric used by the Fed presidents regarding interest rate policy going forward.

However, completely writing off a rate hike today might be foolhardy; recall how we all felt prior to the Brexit vote? Which of us (aside from George Soros) called that one correctly?

Mark Vickery
Senior Editor