Before the bell: What you need to know before the US market open

Billy Bambrough
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Mark Zuckerberg Awarded With Axel Springer Award In Berlin
Pharma firms seem unconcerned so far at the news Facebook founder Mark Zuckerberg and his wife Priscilla Chan are trying to destroy their business model (Source: Getty)

A divided Federal Reserve has voted to leave interest rates on hold, queuing up a hike before the end of 2016 and markets couldn't be happier.

Here's what you need to know before the US market open at 2:30pm London time.

Markets climbed yesterday following the Fed announcement and Janet Yellen's frank press conference.

The S&P is up by 0.30 per cent in the pre-market, the Nasdaq is 0.36 per cent higher, and the Dow is up by 0.33 per cent. The US 10-year yield is down one basis point at 1.64 per cent.

Across Europe, markets are also cheering the Fed, with Germany's Dax up by 1.2 per cent. Asian markets also had a solid session.

The Fed is split

The US Federal Reserve's rate-setting Federal Open Market Committee (FOMC) voted last night to leave interest rates on hold but has set the scene for a hike before the end of 2016.

The Fed raised its benchmark overnight interest rate to a range of 0.25 per cent to 0.50 per cent in December – the first rate hike in almost a decade – but has held rates steady so far this year.

The vote was 7-3 in favour of holding rates, with the case for a rate hike strengthening in recent months. The split marks the level of dissent with the Fed, where Fed chair Janet Yellen has previously worked to maintain agreement on decisions.

During a press conference following the announcement, Yellen said the committee was “generally pleased with how the US economy is doing", and did not see signs the economy was “overheating”.

Bad news for pharma firms?

Facebook founder Mark Zuckerberg and his wife Priscilla Chan have announced the next major focus for their charity, the Chan Zuckerberg Initiative, is to help scientists to "cure, prevent or manage all diseases" by the end of the century.

The move follows the couple's pledge to donate almost all of their Facebook shares to good causes over their lifetimes.

The pair will invest $3bn (£2.3bn) over the next 10 years to help scientists take on the mammoth task, a generous donation but not a huge chunk out of Zuckerberg's personal wealth - he's the fifth richest person in the world according to Forbes and, as of July, was worth $55.2bn.

Shares in the world's major pharmaceuticals firms are so far unaffected.

Stocks to watch

Internet giant Yahoo could be about to announce a massive historic data breach according to tech new site Recode. The report said the hack "exposed several hundred million user accounts" and follows previous reports that Yahoo user details were being sold on the dark web.

The news could complicate Verizon's planned $4.8bn takeover of Yahoo, and renew calls for manadorty reporting of data breaches.

T-Mobile came under pressure earlier due to overnight problems with its high-speed network but annoucned this morning it has everything sorted.

Another (perhaps more real) concern for some of the world's biggest pharma firms, UnitedHealth is going to stop covering some brand name drugs, including Sanofi's insulin and Amgen's white blood cell-boosting drug Neupogen.

Companies reporting today

Corporate data is thin on the ground with car parts retailer Autozone and pharmacy chain Rite Aid posting quarterly earnings ahead of the open.

In economic news

On the economic beat initial jobless claims will be released at 1:30pm London time and existing home sales will cross the wires at 3pm.

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