Investors hit pause button awaiting Fed minutes

With massive bond buying program over, investors seek hints of rate hike plan

Nov 19, 2014 @ 12:01 am

By Bloomberg News

U.S. stock futures traded flat while European stocks hovered near a seven-week high as investors awaited the release of minutes from the Federal Reserve policy meeting.

The Stoxx Europe 600 Index rose 0.1% to 339.58 at 10:13 a.m. in London after earlier falling as much as 0.3%. The benchmark index climbed 1.1% in the past two days as German investor confidence rose and Mario Draghi said the European Central Bank's expanded purchase program could include government bonds. The gauge has rallied 9.6% since its low last month as most lenders in Europe passed capital-strength tests, and Japan's central bank added stimulus.

“Investors will screen the minutes for any fresh hints about the fights between the doves and the hawks at the Fed and the pace of the future rate path,” said Ralf Zimmermann, an equity strategist at Bankhaus Lampe KG in Dusseldorf, Germany. “So far, markets are still pretty relaxed and convinced that the Fed won't do much damage. Whether this conviction will hold true all the time in upcoming months remains to be seen.”

S&P 500 Index futures declined 0.1%. The Fed will release its minutes after the close of European trading hours. The central bank ended its bond-buying program last month amid an improving labor market. The S&P 500 jumped the most since Nov. 5 to a record Tuesday.

BOE MINUTES

In the U.K., where the FTSE 100 Index (UKX) was down 0.2%, Bank of England policy makers voted 7-2 to keep interest rates at a record low, according to minutes of the Monetary Policy Committee's Nov. 5-6 meeting. Some of the majority began to raise concerns about potential inflation pressures.

Spanish, Greek and Italian stocks had some of the biggest advances. Abengoa SA rallied for a third day, up 6.1% to 2.36 euros. Banco Popolare SC increased 2.5% to 10.32 euros, and Piraeus Bank SA climbed 2.7% to 1.14 euros.

Gains in Stoxx 600 health-care companies offset declines from commodity producers. AstraZeneca Plc rose 1.4% to 4,749.5 pence. Rio Tinto Group dropped 1.6% to 2,956.5 pence as iron ore tumbled to the lowest level in more than five years.

ICAP Plc lost 7.4% to 397.7 pence after the world's largest broker of transactions between banks said pretax profit fell 10% in the first half of its fiscal year. Royal Mail Plc (RMG) fell 5.4% after the British postal service said first-half profit dropped and warned that Amazon.com Inc.'s move to develop its own delivery network will trim the parcel market for other carriers.

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