Durable Orders Shows Weakness; First Federal Reserve Meeting of 2015 To Weigh Fed Policy

durableU.S. stocks are down sharply on Tuesday and experiencing selling pressure after weaker than expected durable orders data released this morning disappointed investors’ expectations, and as 4th quarter earning season unfolds, there are renewed concerns about international growth, falling commodity prices, and its overall impact on corporate earnings.

Shares of Microsoft and mining company Freeport-McMoRan are down in trading on Tuesday.

Mining company Freeport-McMoRan reported weaker than expected 4th quarter earning results as the company takes aggressive actions to defer capital expenditures in a move to offset a sharp decline in commodity prices.

This week several other technology companies will report corporate earnings, including Apple.

Durable orders for December missed expectations and showed a decline of -3.4 percent, below the forecast of -3.2 from briefing.com. Durable goods minus transportation also came in weaker than expected after showing a decline of -0.08, below a forecast of + 0.05 percent.

Investors are waiting for a response from the Federal Reserve during their first meeting of 2015 which comes as inflation faces pressure due to falling oil prices, the U.S. dollar has strengthened, and the euro has declined sharply after the ECB decided to take aggressive monetary stimulus actions to combat the risk of deflation.

Investors are awaiting to see if those economic forces may influence the way that the U.S. Federal Reserve is considering when to raise interest rates with most economists forecasting a rate increase in mid 2015.

Syriza Party leader Alexis Tsipras was sworn as Greece’s new prime minister on Monday and will soon be meeting with EU finance ministers and its creditors to try and work out a plan to keep their bailout plan intact.

Later this morning at 10:00 EST, consumer confidence results for January and new home sales results for December will be released.

-Johnathan Schweitzer

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