Market Buzz: Investors weary ahead of Fed notes

Market Buzz: Investors weary ahead of Fed notes
Trading across world stock exchanges is expected to be slow on Monday, as investors are weighing the consequences of an anticipated phasing out of the US central bank's unprecedented stimulus program.

Recent public statements by Fed policymakers have led investors to conclude that the Fed will begin winding down its $85 billion a month in bond purchases starting as early as September.

“I would not be surprised to see a little bit more slop in the equity markets here over the coming days and weeks,” Mark Luschini, chief investment strategist at Janney Montgomery Scott LLC, told Bloomberg.

“I expect Russian floors to start a trading session on August 19 close to the levels of Friday close,” said Ekaterina Kondrashove of Investcafe.

Recent economic data and public statements by Fed policymakers have led investors to conclude that the Fed will begin winding down its $85 billion a month in bond purchases starting as early as September. Falling bond yields in the US is one sign that traders believe the Fed's move is imminent.

Asian equities have inched down on Monday, with Hong Kong’s Hang Seng down 0.09 percent and Australia’s S&P down 0.27 percent. The Nikkei rose 0.11 percent after the Ministry of Finance released positive export data, which showed an increase in exports of 12.2 percent in July.

The Micex finished Friday trading at 1,382.40, up 0.15 percent, and the dollar-based RTS closed at 1333.15, up 0.74 percent. Both indexes fell roughly 0.2 percent last week.

Gazprom Neft, the country’s fourth-largest oil producer, rallied over the past week, advancing to $18.96. This marked the third consecutive week of growth – the longest stretch of weekly gains since February.

Rusal, the world’s largest aluminum company, in wake of falling aluminum prices and a weakening ruble, reported a first half year net loss of $458 million. The company will continue to reduce production by 9 percent through 2013.

Both WTI and Brent are trading high, with WTI up 0.04 percent at $107.50 per barrel, and Brent up 0.03 percent at $110.43. Prices surged last week as the political situation destabilized as both pro and anti-Morsi protesters took to the streets of Cairo. The deteriorating situation in Egypt sparked fears that supplies through one of the world's largest oil gateways, the Suez Canal, could be affected.

On Monday, Spain will hold an auction of 10-year government bonds, which could stoke movement on European floors. Amsterdam’s EURO STOXX gained 0.65 percent, Britain’s FTSE 100 rose 0.26 percent, France’s CAC is trading high at 0.75 percent, and Germany’s Dax increased 0.19 percent.

American shares slid as household companies like Walmart and Cisco reported disappointing performances. The Standard and Poor 500 Index experienced its biggest drop in two months, closing down 0.33 percent Friday, along with decreases in the Dow Jones by 0.2 percent, and 0.9 percent in the Nasdaq basket. Shares will likely continue their slump leading up to Wednesday’s Federal Reserve notes on the bond-buying tapering program.