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Stocks Indicated to Open in Green

Stocks are indicated to start today’s session in positive territory following broad market weakness in the last few sessions. Favorable data out of China and gains in oil prices are driving the opening gains, but minutes of the last Fed meeting coming out later this afternoon will likely determine whether these gains will have any staying power.

Today’s minutes have the capacity of adding uncertainty to the market’s Fed outlook, which is for one or two rate hikes this year. Chairwoman Yellen appears onboard with this view, having realized that executing the central bank’s December plan would have meant hampering the U.S. economy’s competitive position relative to other nations where monetary policy is considerably looser.

This shift in Fed policy gave us the pullback in the dollar’s exchange value and momentum in stock prices. In other words, the Fed started realizing that it would need to take cognizance of the global monetary policy backdrop in order to properly meet its dual mandate. The risk is that views of the FOMC hawks in today’s minutes will muddy this emerging Fed view.

The Fed aside, today’s corporate news includes positive results from spirits maker Constellation Brands (STZ) and Pfizer (PFE) calling off its tax inversion deal with Allergan (AGN) following new restrictive rules from the U.S. Treasury. The failure of this deal is likely a major blow to the growing trend of tax inversions.

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