FOMC Poised to Pull the Plug on QE

Economic Data

- (US) MBA Mortgage Applications w/e Oct 24th: -6.6% v +11.6% prior

- (CL) Chile Sept Total Copper Production: 464.6K v 483.2K prior

- (CA) Canada Sept Industrial Product Price M/M: -0.4% v -0.2%e; Raw Materials Price Index M/M: -1.8% v -0.8%e

- (BE) Belgium Q3 Preliminary GDP Q/Q: 0.2% v 0.1% prior; Y/Y: 0.8% v 1.0% prior

- (US) DOE Crude: +2.06M v +3Me; Gasoline: -1.24M v -1Me; Distillate: -5.3M v -1.5Me

US equity markets are hesitant this morning after four consecutive up sessions, with participants cautious ahead of the FOMC announcement later today. As of writing, the DJIA is down 0.06%, the S&P500 is down 0.08% and the Nasdaq is down 0.40%.

The FOMC decision drops later today, and there is little chance the committee will not end the QE bond buying program as expected. All eyes are on whether the "considerable time" language remains a part of the statement or gets removed. Whether it goes now or in December, Fed watchers expect it to be replaced by something similar in spirit but without any calendar-based overtones.

At a conference in London, OPEC Sec General El-Badri told world oil markets to chill out and said he is not seeing any big change in market fundamentals. Badri claimed the market is currently oversupplied by only 1 million bpd and that current prices should not cause alarm. Total's new CEO said he expects OPEC to support crude prices, as it has in the past, and is not changing the company's long-term outlook. WTI crude futures rallied as high as $82.70 on the remarks, but gave up ground in the wake of the weekly DoE inventory data.

Hewlett-Packard announced two major new computing initiatives this morning. The company unveiled its new "immersive computing" product category, embodied in the 'Sprout' concept device. The computer has two touch screens, one in front, one in place of a keyboard that doubles as a scanner. Separately, HP said it would enter the 3D printing market in 2016 with a new product that is "10x faster than any product on the market today." DDD and SSYS are down more than 5%, while VJET is down 4%.

Facebook is off its worst levels seen after its quarterly report last night, but remains down 6.3% as of writing. All-in-all, its third quarter was great, with user metrics heathy, profits and revenue holding up a bit more than expected. The firm provided revenue guidance for the first time, but the fourth-quarter outlook was not exactly a home run. On the conference call, executives cautioned they would ramp up spending by up to 70% in 2015.

Independent oil companies Hess and Anadarko both saw very strong gains after crushing earnings expectations and improving FY14 guidance. Note results from both firms were padded by gains on continuing asset divestiture programs, while the two also said lower oil prices hurt them in the quarter. HES and APC rose more than 4% in the aftermarket and have given up gains this morning. Refiner Phillips 66 more than doubled its profits thanks to excellent margin gains on cheap crude, although shares of PSX are in the red today.

Shares of US Steel are still up about 10% after reporting excellent third quarter results last night, including earnings that were nearly double the expected amount. The firm warned that fourth quarter results wouldn't be quite as impressive, but said that the US market at least had stabilized and Europe was looking ok. X is up 9.6%.

Looking Ahead

- 12:00 (CA) Canada to sell 2-Year Bonds

- 13:00 (US) Treasury to sell $35B in 5-Year Notes

- 14:00 (US) FOMC Interest Rate Decision

- 16:00 (NZ) New Zealand Central Bank (RBNZ) Interest Rate Decision

- 19:00 (KR) South Korea Sept Industrial Production M/M: +2.1%e v -3.8% prior; Y/Y: +2.8%e v -2.8% prior

- (BR) Brazil Central Bank (BCB) Interest Rate Decision