Desire for recovery on Wall Street, with futures on the Dow Jones jumping over 170 points (+ 0.52%) to 33,938 points; futures on the S&P 500 also advanced 0.50% to 4,252 points. Nasdaq futures jumped 0.57% to 14,344 points. Yesterday the S&P 500 interrupted the two-session bullish phase, yielding 0.11%, to 4,241.84 points: it should be noted that the benchmark index still remains just 0.4% away from its all-time record.
The Dow Jones lost 71.34 points to 33,945.59 points, while the Nasdaq Composite was up 0.13% to 14,271.73 points.
In yesterday’s session eight out of 11 sectors of the S&P 500 closed in the red, primarily utilities, which lost 1.1%.
However, energy and oil companies Exxon Mobil, Occidental Petroleum and Devon Energy did well thanks to the rise in oil prices. You also buy yesterday on Big Tech stocks such as Tesla and Netflix.
10-year Treasury rates are up slightly to 1.49%. Waiting for the data relating to the initial applications for US unemployment benefits. The results of the Fed’s bank stress test are also expected after the end of today’s session on Wall Street. As a rule, after the test results, banks begin to announce how much capital they will distribute in the form of dividends and buybacks.
Watch out for the statements that came yesterday from Robert Kaplan, a member of the Federal Reserve, who said he saw a first hike in US fed funds rates in 2022, estimating inflation measured by the PCE index, for 2021, at 3.4% , and then to 2.4% in 2022.
Last Friday, St Louis Fed chairman James Bullard had the markets nervous, saying he expected a first monetary tightening as early as 2022, or as early as next year, consequently fearing a tapering in advance of previous forecasts.
For his part, in the hearing in Congress a few days ago, the head of the Fed Jerome Powell tried to reassure the markets, stressing that the “Fed will not raise interest rates in advance”.
That said, the markets today don’t seem bothered by Kaplan’s words, unlike last Friday, when Bullard’s statements caused quite a stir.
The dollar is in fact under pressure today, confirming the fact that Kaplan’s hawkish tones have not triggered new shocks on forex.
The euro rose 0.10% against the US currency to $ 1.1938; the dollar also falls against the yen, losing 0.13% to JPY 110.82. Keep an eye on the pound, after the BoE, Bank of England, announced that it had left the UK reference rates unchanged at 0.10%, also confirming the target of the government bond purchase plan, worth 875 billion pounds. Today was the last meeting of the Bank of England Monetary Policy Committee for chief economist Andy Haldane, who is leaving the central bank after 32 years of service.
In recent days, Haldane has argued that the UK is experiencing the “most dangerous time” in its history in containing inflationary risks, since it came out of the European exchange rate mechanism in 1992. The economist spoke of the “beast of the” inflation ”, warning that the UK economy risks“ an upward spiral in wages and prices similar to that of the 1970s and 1980s ”.
Haldane remained consistent with his position and was the only one today to vote in favor of tapering QE, proposing a reduction in bond purchases from £ 875bn to £ 825bn. But the BoE has insisted that UK inflation will be temporary in nature.
The pound reacted by falling 0.39% against the dollar to $ 1.3910, also losing against the euro, with the EUR-GBP ratio up around 0.48% to GBP 0.8583.