Stock Futures Mixed on Prospects of December Rate Hike

Stock futures are mixed as markets continued to process the idea that the Federal Reserve could hike interest rates next month.
By Keris Alison Lahiff ,

Stock futures were mixed as markets continued to process the idea that the Federal Reserve could hike interest rates next month. 

S&P 500 and Nasdaq futures were flat, while Dow Jones Industrial Average futures slid 0.29%. 

A stronger-than-expected October jobs report shored up the chances of a December rate hike, which would be the Fed's first move higher in nearly a decade. The likelihood of a December hike is now 70%, up sharply from a 30% chance several weeks ago, according to CME Group's Fed funds futures.

San Francisco Fed President John Williams said on Saturday that policy normalization was the "next step" as the U.S. labor market continues to tighten and inflation moves back to target levels.

"I do think it makes sense to gradually remove the policy of accommodation that helped get the economy to where we are," Williams said at an event for the Arizona Council on Economic Education. Williams declined to say whether he backs a December rate hike. 

Big banks were on watch after the G20-backed Financial Stability Board published its new rules that prevent financial institutions deemed "too big to fail" from fiscal crisis. The new rules require lenders to hold a buffer of bonds that can be written down quickly equivalent to 16% of risk-weighted assets by 2019. The ratio rises to 18% by 2022. 

Plum Creek Timber (PCL) shares jumped more than 10% in premarket trading after Weyerhaeuser (WY) - Get Report agreed to buy the company in a deal that would create a $23 billion timber company. Weyerhaeuser's Doyle Williams will act as president and CEO of the new company. 

Apache (APA) - Get Report rose 11.6% after Bloomberg reported the oil and gas producer received an unsolicited takeover approach.

Sotheby's (BID) - Get Report beat analysts' estimates in its third quarter. The auction house reported a net loss of 26 cents a share, a penny narrower than expected, while revenue rocketed 47% higher to $137.99 million. Sotheby's said it suffered weaker sales in profitable categories such as jewelry and paintings which led to lower commission revenue. 

Priceline (PCLN) fell 5% before the bell after guiding for a weaker-than-expected fourth quarter. The online travel agency expects fourth-quarter profit no higher than $11.90 a share, well below estimates of $12.42. The company did beat expectations in its recent quarter, though, earning $25.35 a share, above estimates of $24.21. 

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