S&P 500 futures are moving higher in premarket trading as traders look ready to buy stocks after yesterday’s sell-off.
Yesterday, markets were worried about a potential default of China’s developer Evergrande. These fears have almost evaporated today as many analysts stated that the risk of financial contagion was low while traders focused on the opportunity to buy stocks at a discount.
It looks that many market participants were waiting for a 5% pullback so they were ready to push the “buy” button when this opportunity presented itself. Traders began to buy stocks in the last hour of yesterday’s trading session, and this positive momentum remains intact in today’s premarket trading.
Housing Starts Increased By 3.9% In August
U.S. has just released Building Permits and Housing Starts reports for August. Building Permits increased by 6% month-over-month in August compared to analyst consensus which called for a decline of 1.8%. Housing Starts grew by 3.9% compared to analyst consensus of 2%.
It remains to be seen whether these reports will have a material impact on the market as some traders look focused on buying the recent dip while others would prefer to wait for the results of the Fed meeting.
Precious Metals Rebound As Dollar Declines
Today, the U.S. dollar found itself under pressure against a broad basket of currencies while foreign exchange market remained nervous ahead of the Fed Interest Rate Decision and commentary which will be released tomorrow.
The U.S. Dollar Index, which measures the strength of the U.S. dollar against a broad basket of currencies, has moved away from yearly highs and is trying to settle below the support level at 93.10.
Weaker dollar provided material support to precious metals today which is good for gold mining stocks and silver mining stocks. Currently, gold is trying to settle above the resistance at $1775 while silver is testing resistance at $22.60.