Wall Street to Be Impacted by Low US GDP

U.S. stock index futures fell further on Wednesday after data showed that the U.S. economic growth stalled in the first quarter and ahead of the outcome of the two-day Federal Reserve meeting.

U.S. gross domestic product braked more sharply than expected in the quarter and grew at only 0.2 percent annual rate as harsh weather dampened consumer spending and energy companies struggling with low prices cut spending.

The Fed is not expected to raise interest rates. But investors will closely examine the central bank’s statement for clues on when rates are likely to be increased, as a batch of soft data could push back the timing of a hike until the end of the year. The statement is expected at 1400 p.m. EDT (1800 GMT).

“The mixed economic data has been a concern. The low-rate environment is a bubble in itself and its like riding a balloon until the pin pops,” said Andre Bakhos, managing director at Janlyn Capital in Bernardsville, New Jersey.

S&P 500 e-mini futures ESc1 were down 13 points and their fair value – a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract – indicated a lower open.

Dow Jones industrial average e-mini futures 1YMc1 were down 127 points and Nasdaq 100 e-mini futures NQc1 were down 26.25 points.

A number of companies also posted mixed earnings.

via Reuters

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