European stocks will open on the negative side on Wednesday, as investors will be waiting until the end of the meeting of the U.S. Federal Reserve.
According to IG data, the FTSE index of the UK is marked to open a bit below the flatline, the German DAX dropped 0.4 percent, France’s CAC 40 dropped 0.16 percent, and the Italian FTSE MIB dropped by 0.12 percent.
The Fed’s interest rate reduction today by a quarter point is the major market event, widely viewed by traders to be a done deal.
The Federal Open Market Committee forecasts that it will increase the federal funds rate to the range of 3.75 percent to 4.00 percent.
It’s less predicted whether the Chair Jerome Powell will sound dovish in his post-meeting remarks.
October CNBC Fed Survey indicated that after the cut this week, 84 percent of the respondents expected further reduction by December, and similarly, witnessed a 54 percent decline of the third in January.
It is predicted that a total of 100 basis points of rate reductions will be made within this year and next, reducing the fed funds rate to 3.2 percent by the end of 2026.
Earnings also grab the attention of the market this week, with Alphabet, Meta Platforms, and Microsoft reporting after the U.S. close on Wednesday. Thus, Apple and Amazon will announce results on Thursday.
The trade tensions between China and the U.S seem to be more likely to be defused before U.S. President Donald Trump meets with Chinese President Xi Jinping on Thursday.
Therefore, Trump indicated on Wednesday that he will reduce fentanyl-linked tariffs on China before the meeting.
One of the significant and engaging days for earnings in Europe is Thursday, where the firms set to report include Airbus, UBS, Banco Santander, Equinor, Deutsche Bank, BASF, Adidas, GSK, and Endesa. However, the data releases contain Spanish GDP.
