After the Fed threw the market a curve ball yesterday, stocks are set to open on the back foot.
Spread betting quotes indicate the benchmark S&P 500 will open around 2,083, some seven points below last night's close.
The Dow Jones average is seen opening some 65 points lower than last night's close of 17,780.
“Equity markets back in the red this morning with a more hawkish than expected Fed message reviving expectations of a December US rate hike while strong Japanese data has trimmed hopes of more BoJ stimulus tonight,” noted Mike van Dulken, at spread betting firm Accendo Markets.
Later on today, focus will be on the preliminary set of third quarter gross domestic product (GDP) figures. Economists are expecting the annualized growth rate to be around 1.6%, compared to the second quarter's growth rate of 3.9%.
“US economic news-flow has improved relative to consensus forecasts recently, hinting analysts’ models are underestimating the economy’s vigor and opening the door for an upside surprise,” suggests Ilya Spivak, a currency strategist at DailyFX.
“Such a result may boost the likelihood of a 2015 Fed rate hike in the minds of investors, pushing the US Dollar higher,” Spivak added.
“The markets are seemingly unsure of which narrative is more compelling thus far. The risk-on argument contends that the need to tighten monetary policy speaks to strength of the US economy. The risk-off side of the debate warns that higher borrowing costs will only compound head-winds at a time when global growth is slowing thanks to a slowdown in China and sluggish performance in Europe,” Spivak asserted.
On the corporate front, market tittle-tattle concerning a possible bid by Pfizer (NYSE:PFE) for Allergan (NYSE:AGN) had the shares of the latter firming up sharply in pre-market trading.
Pfizer's interest in the maker of Botox was reported in both the Financial Times and the Wall Street Journal.
Before the opening bell, updates are expected from Aetna, Mastercard and Time Warner Cable, plus overseas technology plays Nokia and Sony.
Last night's trading update from online payments pioneer Paypal (NASDAQ:PYPL) has left the market underwhelmed, with the stock sliding 6% or so in electronic trading this morning.
On the other side of the pond, banking giant (NYSE:BCS) is taking a kicking, down 5.3%, after third quarter numbers failed to come up to snuff.
For the three months to September 30, statutory pre-tax profit came in at £861mln compared to £1.22bn in the same period a year ago - and down from £1.7bn in the preceding quarter this year.
Announcements diary
Companies: Aetna; Air Products & Chemicals; Alexion Pharmaceuticals; Allegion; Altria Group; American Tower; AmerisourceBergen; Ball; Baxalta; BorgWarner; Boston Properties; CME Group/IL; CMS Energy; CocaCola Enterprises; ConocoPhillips; Delphi Automotive; Eastman Chemical Co; Electronic Arts; Ensco; Essex Property Trust; Expedia; First Solar; Flowserve; Fluor; Genworth Financial; Goodyear Tire & Rubber; Hanesbrands; Harman International Industries; Host Hotels & Resorts; Invesco Ltd; Johnson Controls; Leggett & Platt; Marathon Petroleum; Mastercard; McKesson; Pitney Bowes; PPL; Praxair; Qorvo; Republic Services; SCANA; Sherwin-Williams; Starbucks; Time Warner Cable; Western Union; Xcel Energy; Xylem/NY; Zimmer Biomet Holdings
Macro: Advance gross domestic product; Pending home sales; Unemployment claims