🥇 First rule of investing? Know when to save! Up to 55% off InvestingPro before BLACK FRIDAYCLAIM SALE

Dovish Fed lifts Wall Street stock futures to record high

Published 04/07/2021, 08:05 PM
Updated 04/08/2021, 08:25 AM
© Reuters. People wearing protective masks, following the coronavirus disease (COVID-19) outbreak, are reflected on a screen showing stock prices outside a brokerage in Tokyo
UK100
-
US500
-
JP225
-
SPY
-
DX
-
LCO
-
CL
-
USO
-

By Huw Jones

LONDON (Reuters) - Wall Street was poised to notch a record high on Thursday after reassurance from the Federal Reserve that its bond-buying support for economic recovery won't be ending anytime soon.

E-mini futures on the S&P 500 were up 0.33% at 4,083 points, just off a record high of 4,092.75 earlier. Nasdaq futures gained 0.86%

Minutes of the Fed's last policy meeting, published on Wednesday, showed members felt the economy was still short of target and were in no rush to scale back their $120 billion a month of bond buying.

"As long as that message remains consistent and, more importantly, unified, that is going to have a bigger and bigger influence on yields," said Derek Halpenny, head of research for global markets at MUFG.

"That is what is key in the market at the moment, as rates appear to have reached some degree of equilibrium, and that is what is encouraging the equities market performance. I can't really see anything on the immediate horizon to upset that."

U.S. Treasuries yields were down from their 14-month highs, although analysts said markets will be tested next week when the U.S. earnings seasons gets underway.

The U.S. weekly jobless claims data is due at 1230 GMT, and is expected to show the number of Americans filing for new unemployment benefits dropped in the latest week, a further sign the economy is recovering from COVID-19.

Fed Chairman Jerome Powell speaks at 1600 GMT at an International Monetary Fund event and he is likely to reiterate the dovish outlook.

There was little in the way of corporate news, though shares in Tesla (NASDAQ:TSLA) Inc rose about 1% after President Joe Biden's administration proposed a $174 billion boost to electric vehicles.

ECB DOVISH TOO

Stocks in Europe also reached record highs, buoyed by optimism in Britain over easing lockdown restrictions and supportive outlooks from the Fed and the European Central Bank.

The European STOXX index of 600 leading companies rose 0.44%, just off the high of 436.66 points it reached earlier in the session. London's blue-chip FTSE 100 index was up 0.4%.

"It's looking good as evaluations in Europe are much lower than they are in the U.S., so there is potentially more upside. The line of least resistance for European markets is higher," said Michael Hewson, chief market analyst at CMC Markets.

"In terms of economic re-opening, there is enough optimism built in at the moment to drive markets quite a bit higher from here, and the Fed has reiterated it's going to remain on hold for a while," Hewson said.

The ECB said in the account of its March 11 meeting, published on Thursday, that it was important to provide reassurance there would be no change in its accommodative monetary policy for as long as necessary.

In Asia, MSCI's broadest index of Asia-Pacific shares outside Japan inched up 0.3% in quiet trade. Japan's Nikkei slipped 0.3%, not helped by news Tokyo's governor had asked for emergency measures to stem a surge of COVID-19 infections.

In currencies, the dollar index eased to 92.291 from its recent five-month high at 93.439.

The euro was steady at $1.1877, after rising as high as $1.1914 overnight following a surprisingly upbeat survey of European Union business activity.

In commodity markets, gold was at $1,750 an ounce.

Oil prices fell after official figures showed a bigincrease in U.S. gasoline stockpiles, causing concern about demand for crude weakening in the world's biggest consumer of the resource at a time when supplies around the world are rising.

© Reuters. FILE PHOTO: FILE PHOTO: A man walks on Wall Street in New York, U.S.

Brent fell 29 cents to $62.87 a barrel. U.S. crude lost 44 cents to $59.33 per barrel.

(Aditional reporting by Wayne Cole and Chibuike Oguh; editing by Larry King)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.