Luxury stocks decline, market awaits Fed rates decision
investmentnews.comLuxury stocks led losses in Europe after Gucci owner Kering SA warned about declining sales, fueling worries about high-end consumer spending in China. Treasuries and US equity futures were steady before today’s Federal Reserve meeting.
Kering sank 15%, one of the biggest drops in the Stoxx 600 Index, with LVMH, Burberry Group Plc and Christian Dior SE also seeing losses. Europe’s benchmark gauge slid 0.3%, while contracts for the S&P 500 were little changed after hitting a fresh high on Tuesday.
In other markets, the focus was firmly on the path for US interest rates. While the central bank is expected to hold, investors will be parsing commentary to assess how quickly it might start to ease. The decision and economic forecasts will be released at 2 p.m. in Washington. Chair Jerome Powell will hold a press conference 30 minutes later.
The Fed’s projections — the so-called dot plot — will be in focus as investors gauge how many rate cuts policymakers are expecting this year, according to Michael Brown, senior research strategist at Pepperstone Group Limited.
“The risk of those dots shifting has grown and if we do see that median move higher, then obviously you’d expect a knee jerk rally in the dollar and a knee jerk move lower in Treasuries and equities,” he said. “With that risk on the horizon, no one has particularly much conviction to do anything much this morning.”
The Bloomberg dollar index advanced for a fifth session.
Separately, the pound whipsawed after Britain’s inflation rate fell more sharply than expected.
In Japan, the yen fell to the weakest level since 2008 against the euro on speculation the Bank of Japan will keep its monetary policy accommodative even after it ended the world’s last
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