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S & P 500 set to prepare its first intraday record since May as the Fed leaves "patience"



  • The S & P 500 index will mark an intraday high on the opening, the first since May 1,
  • Dow is about to open up, at its highest level since October 3 in total
  • Gold surges 2.6% to $ 1,384.50 an ounce, which hits a 5-year high
  • Enterprise software messaging company Slack Technologies is slated to list on the NYSE

US stock indices Thursday were set to extend gains to a fourth straight Today, near the records the Federal Reserve signaled that political relief might be forthcoming to sustain the economy.

How are benchmarks going?

Stock futures grew early on Thursday, with the Dow Jones Industrial Average

YMU19, + 0.86%

up 234 points, or 0.8%, at 27,769, those for the S&P 500 index

ESU19, + 0.90%

achieved 28.60 points, or 1%, of 2,962.25, while Nasdaq-100 futures

+ 1.11%

increased 109 points, or 1.4%, at 7.811.50.

If equity futures gains hold, Dow

DJIA, + 0.95%

would hit its highest level since October 3 when the blue chip reference put in a record of 26,828.39, S & P 500

SPX, + 0.95%

would trade over an intraday mail last hit May 1 at 2,954.13 while Nasdaq Composite Index

COMP, + 1.12%

sits about 1% short in its 3-time peak worldwide.

What drives the market?

Fed chairman Jerome Powell on Wednesday strongly suggested that the central bank would cut the benchmark interest rates, currently in a range of 2.25% -2.50% in the coming weeks if the economic outlook was hit by US and China trading tensions does not show signs of improvement.

"The case for some more accommodating policy has strengthened," Powell said at a press conference on Wednesday to discuss the high expected decision of the Federal Open Market Committee. Policy makers kept prices unchanged as expected, but removed the word "patient" from the updated policy statement, suggesting it is ready to act soon.

Although markets have been largely assuming that Powell & Co. will react to growing signs of stress In the economy, central bank's position on looser monetary policy was seen as a strong case for the continued rise in equities despite concerns about financial difficulties.

The fat was mostly optimistic about the outlook, but inflationary pressures have declined and forced to lower the forecast for PCE inflation in 2019 to 1.5% from 1.8% below the 2% target. At the same time, it left its gross domestic product estimate of 2.1%.

Oddly low inflation has often been cited by FOMC members as one of the main reasons why there is doubt about its monetary policy path. The Fed's next meet on July 30, while President Donald Trump is expected to speak to Chinese President Xi Jinping on the sidelines of the upcoming group of 20 meetings with well-developed nations in Japan, where a trade policy could be reached.

See : Summary of the Fed Decision and Powell Press Conference

Dovish rhetoric from central bank policy makers around the world has contributed to sending commodity prices, and especially gold, rocket higher, with increased expectations of interest rates. which can suppress the appetite for bullion, may be lowered.

Bank of Japan Gov. Haruhiko Kuroda and the Bank of England on Thursday, came to the chorus of bankers, including Powell and the European Central Bank's President Mario Draghi, who signals a readiness to boost the stimulus, should global risks be at least partially affected by trade, worsen.

BOE says rising tariffs worsen the outlook for the world economy. Kuroda said "we will, of course, consider expanding the stimulus without hesitation," he told a press conference, according to Reuters.

What data is the focus?

The Philadelphia Fed manufacturing index in June fell to just 0.3 after the record a four-month high of 16.6 last month. Any reading above zero indicates improved conditions. Economists polled by MarketWatch expected an 8 reading.

Initial unemployed claims, a rough way of measuring redundancies, fell by 6,000 to 216,000 in the seven days ended June 15, the government said on Thursday.

What are strategists who say?

"The indicators will open higher along with high gold and oil prices. The mounting of geopolitical tensions continues to spark a rush to security, while hopes for a price surge dominate the stock markets," says Peter Cardillo, market economist at Spartan Capital Securities.

"Powells press conference [on Wednesday] showed some aversion, but it seems markets are sure the Fed will cut in July. If data deterioration is worse than expected, it will grow in 50-cuts during the July meeting in the coming weeks, "wrote Edward Moya, senior market analyst at Oanda in a daily research note.

Which shares are in focus

Slack Technologies Inc .

WORK, + 0.00%

is set to make debut on the New York Stock Exchange in a highly anticipated direct listing of the corporate software company. Here's what you should know.

How do other assets trade?

Before US markets opened on Wednesday, Hong Kong's Hang Seng index became

HSI, + 1.23%

rose 1.2% and China's Shanghai Composite Index

SHCOMP, [2.45%] + 2.38%

are pooled by 2.4%. Japanese Nikkei 225

NIK, + 0.60%

meanwhile closed 0.6%, while in Europe, Stoxx Europe 600

SXXP, + 0.67% traded 0.6% higher.

Gold futures

GCQ19, + 2.81%

meanwhile, increased 2.6% and affected its highest level since 2013 at $ 1,384.50 a ounce while 10-year government bond

TMUBMUSD10Y, -1.40%

affected a return below 2%, while US dollars, measured by the ICE Dollar Index

DXY, -0.46%, fell 0.5% to 96.67.

Crude Rates

CLU19, + 4.31%

increased among geopolitical tensions in the Middle East. Iran says it shot down an American drone in its airspace.


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