Markets opened relatively flat on Wednesday ahead of the Federal Reserves policy statement. The two-day meeting ended today and it’s expected that the Fed will announce the end of its monthly bond-buying program. The session will not end with a press conference by Federal Chair Janet Yellen, like previous sessions. This leads many to believe that they will not announce any major changes in their policy until the December meetings. The Fed has been underscoring the strengthening economy with positive data in the recent months, like strong consumer growth and business spending, manufacturing growth, steady hiring and low unemployment data. Many investors are predicting that they Fed will announce they plan on keeping interest rates near record lows as well. Peter Jankovskis, co-chief investment officer at OakBrook Investments, said, “Everybody is looking ahead to the FOMC statement in the afternoon. I’d expect we won’t have a lot of movement before that. Not a lot is expected other than a confirmation that they eliminated QE and maybe we’ll get additional guidance, hints on when they might start raising rates.”
Shares of Fiat Chrysler Automobiles (FCAU) were trading higher after the company announced that they would be placing a new recall on Ram trucks due to a fire hazard. They reported that there would be 381,876 trucks affected by the recall and include the Ram 2500 and 3500 pickups and the 5500 chassis cap built between 2010 and 2014. There are nearly 315,000 trucks located in the United States and nearly 60,000 located in Canada. The issue is with the fuel heater and could overheat.
Shares of Goodyear Tire & Rubber Company (GT) were on the rise after the company posted strong results and reported that they would be buying back nearly $150 million shares during the fourth-quarter. Operating income was up 30% during the third-quarter, while margins in the business were up 10.2% from the 7.4% this time last year. Net income came in at $161 million, or 58 cents per share. The company earned, excluding items, 87 cents per share and revenue came in at $4.7 billion. Analysts had been expected earnings of 70 cents per share and revenue to come in at $4.93 billion. The tire giant also reported that they now expect 2014 operating income to come in 10 to 15 cents higher than they previously thought. Ryan Brinkman, an analyst with J.P. Morgan, said, “We expect a very sharp positive reaction to this set of significantly better results, particularly given what we see as low investor expectations.”
That’s all for today,
Warren Gates, Normandy Research