Created on Wednesday, 18 December 2013 Written by THE ASSOCIATED PRESS
NEW YORK (AP) — A global consensus that the U.S. will not pull back on its aggressive monetary policies is pushing markets higher at home and abroad. The Federal Reserve ends its two-day meeting Wednesday and issues its last statement and updated economic forecasts of 2013.
KEEPING SCORE: Dow Jones industrial futures are up 36 points to 15,846. S&P futures have gained 3.7 points to 1,776.70. Nasdaq futures are up 5.75 points to 3,466.50.
OVER THERE: In addition to the anticipated actions of the Fed, investors were encouraged by signs the Germany economy is gaining momentum. France's CAC-40 rose 0.6 percent to 4,093, while Germany's DAX rose 0.9 percent to 9,168. The FTSE index of British shares climbed 0.4 percent to 6,511. Stocks mostly rose in Asia, too. Japan's Nikkei 225 closed 2 percent higher at 15,587.80, while Hong Kong's Hang Seng index climbed 0.3 percent to 23,243.82. China's Shanghai Composite index edged down 0.1 percent to 2,148.29 and South Korea's Kospi finished 0.5 percent higher, at 1,974.63.
JOBS v. INFLATION: The final monthly U.S. jobs report of 2013 was huge. Unemployment fell to 7 percent in November, the lowest in five years, and employers added 203,000 jobs. But inflation remains historically low and well under the Fed's 2 percent target rate. That means consumers and businesses are not spending, and that is making Fed officials cautious about pulling back on the monthly $85 billion bond-buying program that has kept markets flush with cash.
BUILDING BLOCKS: Investors are going to be watching news on the housing front Wednesday. Economists expect the Commerce Department will report that new U.S. home construction rose 4 percent in November. The report will also include figures from September and October, which were delayed due to the partial government shutdown. Before the opening bell, the homebuilder Lennar surprised Wall Street by reporting a 32 percent profit spike for the fourth quarter. Shares are up 4 percent.
EVERYTHING IS POLITICAL: Markets are also being buoyed over something that hasn't happened in three years. Congress appears to be on the verge of passing a budget that is unlikely to hurt the economy. As a result, many economists expect the U.S. could experience financial growth it has not seen since the beginning of the last recession six year ago.
CORPORATE FARE: FedEx is reporting a 14 percent jump in second-quarter earnings. Oracle will post earnings after bell Wednesday. Nike, ConAgra, Rite Aid and Walgreen are among the companies reporting earns later this week.