Stock futures inched higher on Tuesday, Sept. 19, putting markets on track for more records as the Federal Reserve meets to discuss monetary policy. 

Dow Jones Industrial Average futures were up 0.08%, S&P 500 futures added 0.08%, and Nasdaq futures increased 0.1%. 

A generally upbeat mood propelled stocks upward the day before, pushing the S&P 500 and Dow Jones Industrial Average to new heights. The S&P 500 traded above a record level of 2,500 and set a new high for its second day in a row, while the Dow settled at a record for the fifth day. The Nasdaq missed a new milestone.

The monetary-policy arm of the Fed, the Federal Open Market Committee, will conclude a two-day meeting with an announcement on Wednesday afternoon, followed by Chair Janet Yellen's press conference.

Markets have priced in a zero chance of change to U.S. interest rates, but near-certainty to the Fed beginning to unwind its $4.5 trillion balance sheet, a process it previously said it would begin "relatively soon."

"If the signals are right, then this week should mark the point when the ... Fed finally begins the long-overdue process of unwinding its bloated balance sheet," said Aberdeen Standard Investments investment manager James Athey. "That would make it a milestone in the post-crisis monetary experiment.

Moving out of "this parallel universe of endless liquidity is going to be a fraught process," he added. "No one's done it before, so no one can credibly claim to know what will happen. We are very early on in the process but, so far, financial markets have largely remained unmoved and unencumbered by the prospect of falling, as opposed to endless, liquidity."

Fed funds futures are currently pricing in a nearly 61% chance of a 25-basis-point increase at the December meeting, putting the federal funds rate at 1.25% to 1.5%.

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President Donald Trump will address the U.N. General Assembly on Tuesday in what is expected to be a speech outlining strategy in dealing with North Korea. The authoritarian country has conducted a number of missile tests in recent weeks, with two of the devices flying over Japan, and has threatened to bomb U.S. territory Guam. The North Korean threat has unsettled markets since it returned to headlines in early August. 

In economic news, housing starts declined by 0.8% to a seasonally adjusted rate of 1.18 million in August. That decrease matched estimates. Building permits rose by 5.7% to a rate of 1.3 million, slightly higher than an expected 1.22 million. 

Import and export prices moved higher in August, according to the Bureau of Labor Statistics. Import prices increased by 0.6%, higher than an expected 0.4%. Excluding fuel, prices rose 0.3%. Export prices rose by 0.6%, triple the expected increase. 

AutoZone Inc. (AZO) rose nearly 5% in premarket trading following a better-than-expected fourth quarter. The car parts retailer earned $15.27 a share over the three-month period, up from $14.30 a year earlier. Adjusted earnings of $5.18 a share beat estimates by 7 cents. Revenue increased by 3.3% to $3.51 billion, edging out estimates of $3.49 billion. Domestic same-store sales increased 1%, falling short of an expected 1.6%. 

Steelcase Inc. (SCS) added more than 5% after exceeding earnings consensus over its recent quarter. Second-quarter net income was flat at 31 cents a share, but beat estimates of 23 cents. Revenue increased just over 2% to $775.6 million, but missed expectations for $757.4 million. Third-quarter guidance also came in lower than estimated -- the company anticipates 21 cents to 25 cents a share, below a projected 28 cents. 

Synchronoss Technologies Inc. (SNCR) moved sharply lower in premarket trading after its largest shareholder, Siris Capital Group, backed off of previous interest in an all-cash acquisition. Siris said it could potentially pursue other deals with the company and Synchronoss said "active discussions" are still ongoing. 

Updated from 7:40 a.m. ET, Sept. 19. 

 

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