On the 25th anniversary of the October 1987 crash, Wall Street is heading lower, albeit nowhere near as dramatically as on that Black Friday.
A host of US companies have reported disappointing earnings, from Google to Microsoft to General Electric, outweighing some positive economic data (retail sales and industrial production) earlier in the week.
Meanwhile US new existing home sales came in 1.7% lower month on month after an 8% gain in August, but this was much in line with expectations. But the next question is, what does the US Federal Reserve do? Annalisa Piazza at Newedge Strategy said:
Recent data on housing activity have been rather encouraging in the past few months (i.e National Association of Homebuilders and new home sales), suggesting that demand for houses has actually improved. However, caution remains high.
Next week's Federal open markets committee statement will be closely watched as the Fed might change its view on the development of the US housing market. In September, the Fed statement highlighted that "the housing sector has shown some further signs of improvement, albeit from a depressed level". Next week's statement might highlight that the housing market has finally gained momentum despite the still high level of uncertainty.
The Dow Jones Industrial Average is currently 112 points or 0.83% lower.
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