By Investing.com — US stock futures are muted, with markets gearing up for a much-anticipated Federal Reserve policy decision later this week. Uncertainty surrounds whether Fed officials will roll out a 25-basis point cut or a deeper 50-basis point reduction. Elsewhere, former president Donald Trump survives a second apparent assassination attempt, according to media reports citing law enforcement officials.
1. Futures muted
US stock futures were muted on Monday, as investors attempted to gauge the scope of a widely expected Federal Reserve interest rate cut this week and reacted to reports of a second apparent assassination attempt on former president Donald Trump.
By 01:51 ET (05:51 GMT), the Dow futures contract had gained 24 points or 0.1%, S&P 500 futures were unchanged, and Nasdaq 100 futures had edged down by 20 points or 0.1%.
All three of the major averages advanced last week, ending trading on Friday near two-week highs. Rising bets that Fed could roll out a 50-basis point reduction after its two-day meeting on Sept. 17-18 powered equities higher, rather than a more modest 25-basis point drawdown.
Small firms were key beneficiaries of the increased wagers on a deeper cut, with the Russell 2000 small-cap index adding 4.4% for the week. These companies rely heavily on floating interest rate loans to fund their operations, leaving their shares more exposed to changes in borrowing costs.
Meanwhile, media reports, citing law enforcement officials, said Trump was safe on Sunday after the Secret Service disrupted an attempt on his life while he was golfing at his course in Florida. The incident comes after Trump, the Republican candidate in this November’s crucial presidential election, was injured in the right ear in a prior assassination attempt at a rally in Pennsylvania two months ago.
2. Fed in focus
Traders are now focused on the Fed’s upcoming knife-edge decision.
Over the weekend, the CME Group’s (NASDAQ:CME) closely-monitored FedWatch Tool showed that there was a 59% probability of a 50-basis point cut and a 41% chance of 25-basis point. The odds were evenly split on Sunday.
Markets had earlier placed a higher chance on a quarter-point cut following data last week showing slightly hotter-than-anticipated producer and consumer price growth in August.
But media reports have suggested that uncertainty remains around how the Fed will approach policy this month, while former New York Fed President Bill Dudley said the case for a 50-basis point cut was strong.
Analysts at Vital Knowledge argued on Friday that the attention paid to the Fed’s potential rate cut size has been “myopic,” saying that, no matter the outcome, the decision “in aggregate is likely to be quite dovish.”
3. Boeing strike could drag on, union leader says
A work stoppage at Boeing (NYSE:BA) could drag on “for a while” as the more than 30,000 striking employees push the aerospace giant to improve their pay and pensions, according to union leader Jon Holden.
Speaking in a radio interview on Saturday, Holden said the workers have the “most leverage and the most power at the most opportune time that we’ve ever had in our history.” Members of the union, which represents workers in the US Pacific Northwest, “are expecting us” to use that influence, he added.
Holden had initially backed a tentative deal with Boeing that would have raised wages by 25% over four years, among other concessions. However, workers overwhelmingly voted against the new contract and chose to begin a strike on Friday.
A prolonged labor action threatens to dent Boeing’s finances at a time when the company is already facing extended production delays and regulator scrutiny over the safety of its jets.
Boeing’s share price slumped by 3.7% on Friday, and has shed more than 37% so far this year.
4. Disney, DirecTV reach distribution deal, ending blackouts
Disney and DirecTV have agreed on the terms of a fresh distribution deal, once again granting access to the entertainment giant’s offerings to 11.3 million of the satellite providers’ subscribers.
Negotiations had been fraught, with the impasse leading to a DirecTV subscribers losing out on access to Disney-owned networks like ESPN and ABC that have broadcast well-known events like “Monday Night Football” and the most recent US presidential debate.
Disney has sought to increase the fees it charges DirecTV to carry some of its more popular channels, while DirecTV has called for more flexibility on how it sells the content to viewers, according to media reports.
Under the new terms, Disney’s economic compensation from DirecTV has improved, reports said.
Meanwhile, the firms added in a joint statement that DirecTV will be able to bundle Disney channels by genres. Some packages will also include Disney’s streaming services — Disney+, Hulu, and ESPN+.
5. Oil hovers around flatline
Oil prices were close to the flatline on Monday as traders positioned for a potential interest rate cut by the Federal Reserve later this week.
But gains were capped by persistent concerns over slowing demand, especially following a slew of weaker-than-expected economic data from top oil importer China over the weekend. Industrial production and retail sales both missed expectations, while unemployment rose and house prices fell.
U.S. production was also seen picking up from the impact of Hurricane Francine in the Gulf of Mexico.
Market holidays in China and Japan also kept trading volumes relatively slim.
Brent oil futures expiring in November were mostly unchanged at $71.63 a barrel, while West Texas Intermediate crude futures had inched up 0.1% to $67.80 a barrel by 01:50 ET.