US Stock Futures Rise as Fed Meets and Crude Oil Gains

New York (Dec 13)  Stock futures moved higher on Tuesday, putting the Dow Jones Industrial Average on track for more records, as the Federal Reserve's two-day meeting to discuss interest rates begins.

Dow futures were up 0.25%, S&P 500 futures gained 0.33%, and Nasdaq futures climbed 0.33%.

The Dow ended Monday with its 15th record closing high since Election Day and sixth record close in a row. The blue-chip index has been on a roll since President-elect Donald Trump won the general election a month ago and began to pick candidates for cabinet positions that many presumed would be friendly to Wall Street. For example, Steve Mnuchin, a former Goldman Sachs executive, has been nominated as Treasury secretary and ExxonMobil (XOM) CEO Rex Tillerson as secretary of state.

The Fed will convene for a two-day meeting on Tuesday morning, culminating in a policy announcement Wednesday afternoon. Economists anticipate few big surprises in terms of policy change: An interest rate hike in December has been telegraphed for months and the economic data has backed up a shift to policy normalization for some time.

"There's almost no question," Dan North, chief economist at Euler Hermes North America, told TheStreet. "In September when they published the dot plot, [a majority] out of 17 members said, 'We're going to raise rates this year.' So when it comes to the end of the year, if you said you were going to do it, you pretty much have to do it."

The likelihood of a rate hike when the Fed meets currently sits at 93%, according to CME Group fed funds futures. Most are anticipating an increase of 25 basis points with a few economists even suggesting the slim chance of an increase of 50 basis points.

Source: TheStreet