Dow Futures, Tech Stocks Gain as Fed Reduces Inflation Risk


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The minute of the Monday market

  • Global stocks are climbing, with Europe hitting new highs, as calming comments on inflation from the Fed bolster market optimism.
  • Fed officials repeat their “transitional” speech on price increases, St. Louis Fed Chairman James Bullard noting that “we’re not there yet” in terms of discussing policy changes .
  • Bitcoin exceeds $ 40,000 after Elon Musk’s Tweets comments on mining power consumption, but falls below $ 39,000 in overnight trading.
  • Yields on the 10-year benchmark note slack to 1.589% in overnight transactions as the dollar index slips 0.3% to an early January low of 89.585.
  • CDC data shows that 130.6 million Americans have now been fully immunized against the coronavirus, with approximately 286.9 million doses administered as of Monday.
  • U.S. equity futures suggest a firmer open on Wall Street ahead of House Price Index data at 9:00 a.m. Eastern Time.

Wall Street futures rose again on Tuesday, as investors added technology and growth stocks to their portfolios following soothing comments on inflation risks from a trio of Federal Reserve officials and a record opening for markets in Europe.

Benchmark 10-year T-bill yields held their two-week low and were traded south of 1.59% in overnight transactions, after Fed Governor Lael Brainard, along with his colleagues James Bullard and Ralph Bostic reiterated the central bank’s view that current inflation levels – the highest since 2009 – will slow through the end of the year as Base effects will fade and supply chain bottlenecks will ease.

“I think there will come a time when we can talk more about changing the parameters of monetary policy, I don’t think we should be doing that while we are still in the pandemic,” Bullard said during a event organized by Yahoo! Finance, adding that “we’re not quite there yet” in discussing any changes in Fed policy.

The unwavering stance of Fed officials – following a series of market participant tests – appears to have boosted investor optimism on Tuesday as investors watch the dollar drop to multi-month lows from its peaks. peers in global currencies while cautiously adding down positions in technology and growth stocks.

Nasdaq Composite index futures are valued for an opening gain of 75 points, in part due to pre-market advances for Apple (AAPL) – Get the report, You’re here (TSLA) – Get the report and advanced micro-devices (AMD) – Get the report, while those linked to the S&P 500 indicate a gain of 13 points.

Futures contracts linked to the Dow Jones Industrial Average, meanwhile, show an opening gain of 100 points for the 30-stock benchmark.

Bitcoin prices also returned in March, rising to just over $ 40,000 in overnight trading following Elon Musk’s comments related to energy use in mining, with prices falling back to around $ 38,000 at the start of Tuesday.

Oil prices also retreated after a string of multi-day gains that brought Brent closer to the $ 70 mark, with traders considering negotiations between Washington and Tehran that could see the Republic re-entering global crude markets. .

WTI futures for July delivery were marked 48 cents lower at $ 65.57 per barrel while Brent contracts for the same month fell 40 cents to $ 68.06 per barrel.

Overnight in Europe, the Stoxx 600 hit an all-time high of 447.01 points amid a wider rally in the region, with Germany’s DAX rising 0.77% amid a 22 billion merger of dollars between real estate giants Deutsche Wohnen and Vonovia SE which softened the impact of a lower-than-expected reading on Q1 GDP.

In Asia, Japan’s Nikkei 225 closed 0.67% higher at 28,553.98 points as flow from last night’s rally on Wall Street lifted tech stocks, while the MSCI ex-Japan index to the region wide was up 1.6% as the closing hours of trading approached. .

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