The Dovian Fed is pushing Wall Street stock futures to a record high
© Reuters. Individuals wearing protective masks following the coronavirus disease (COVID-19) outbreak appear on a screen showing stock prices outside of a broker in Tokyo
By Huw Jones
LONDON (Reuters) – Wall Street was poised to hit a record high on Thursday after the Federal Reserve reassured that its bond-buying support for the economic recovery would not end anytime soon.
The e-mini futures on the market rose 0.33% to 4,083 points, just below the record high of 4,092.75 previously. Nasdaq futures were up 0.86%
Minutes of the Fed’s latest meeting, released Wednesday, showed that members felt the economy was still below target and were in no rush to scale back their $ 120 billion monthly bond purchases .
“As long as this message remains consistent, and most importantly, it will have an increasingly large impact on returns,” said Derek Halpenny, head of research for global markets at MUFG.
“That’s key in the market right now as interest rates seem to have reached some equilibrium, and that’s what drives the stock market’s performance. I can’t see anything on the immediate horizon that could interfere with that.” “”
US Treasury bond yields fell from their 14-month highs despite analysts saying the markets will be tested next week when the US earnings season kicks off.
The weekly US unemployment claim data is due at 12:30 PM GMT and is expected to show the number of Americans who applied for new unemployment benefits in the past week. This is another sign that the economy is recovering from COVID-19.
Fed chairman Jerome Powell, speaking at an International Monetary Fund event at 1600 GMT, is likely to reiterate the cautious outlook.
There was little on company news, although shares of Tesla (NASDAQ 🙂 Inc rose about 1% after President Joe Biden’s administration proposed a $ 174 billion increase in electric vehicles.
ECB ALSO DOVISH
Stocks in Europe also hit record highs, buoyed by UK optimism about the easing of lockdown restrictions and the supportive outlook from the Fed and the European Central Bank.
The European STOXX index of 600 leading companies rose 0.44%, just below the high of 436.66 points it had reached at the start of the session. London’s blue chip rose 0.4%.
“It looks good as European valuations are much lower than the US, so there may be more upside potential. The line of least resistance for European markets is higher,” said Michael Hewson, chief market analyst for CMC Markets.
“There is enough optimism built in about the economic reopening right now to give markets a significant boost from here, and the Fed has reiterated that it will be on hold for a while,” said Hewson.
In its March 11 report, published on Thursday, the ECB said it was important to reassure you that its accommodative monetary policy would not change for as long as necessary.
In Asia, the broadest MSCI index for stocks in the Asia-Pacific region outside Japan rose 0.3% in quiet trading. The decline was back 0.3%, which was not supported by news. Tokyo’s governor had asked for immediate action to curb an increase in COVID-19 infections.
In currencies, it fell from its recent five-month high of 93.439 to 92.291.
The euro remained stable at $ 1.1877 after rising to $ 1.1914 overnight after a surprisingly positive survey on European Union business.
In the commodity markets, gold was valued at $ 1,750 an ounce.
Oil prices fell after official figures showed a sharp surge in US gasoline inventories, leading to concerns over crude oil demand among the world’s largest consumer of the resource at a time when global supply is increasing.
fell 29 cents to $ 62.87 a barrel. lost 44 cents to $ 59.33 a barrel.
(Additional reporting by Wayne Cole and Chibuike Oguh; editing by Larry King)