Investors banking on a “Santa Rally” would have been encouraged by the strong start to the week European indices have enjoyed. Unfortunately, we are seeing weakness in European futures this morning as we prepare for Tuesday’s open as investors continue to gauge the outlook for U.S stimulus before the Federal Reserve meets today.
The Federal Reserve will begin a 2-day meeting today to discuss, amongst other things, the central banks stance on tapering unprecedented bond purchases. Over the last week we have seen more and more economists develop the belief that Fed policymakers will indeed taper this Wednesday, but this in a way is proof that the economy is strong.
More than two stocks gained for each that fell on the MSCI Asia Pacific Index, which dropped for a second week last week as improving U.S. economic data spurred bets stimulus will be reduced. Meanwhile, gold advanced for a third day and silver gained as investors await the U.S. Federal Reserve’s decision on the timeline for reducing stimulus.