U.S. stock futures were slightly lower on Wednesday morning before the minutes of the Federal Reserve’s March meeting were released, which investors will search for clues about the central bank’s strategy if the economic rebound from the coronavirus pandemic gets too hot .
How are stock benchmarks traded?
-
Futures for the Dow Jones Industrial Average
YMM21,
-0.12% fell 49 points, or 0.2%, near 33,266.
-
S&P 500 index futures
ESM21,
-0.12%
ES00,
-0.12% were 6 points lower at 4,058, a loss of 0.2%.
-
Nasdaq 100 futures
NQM21,
-0.22% traded near 13,540, 31 points, or 0.2%.
On Tuesday, the Dow
DJIA,
finished the S&P 500 index up 96.95 points, or 0.3%, to end at 33,430.24
SPX,
fell 3.97 points, or 0.1%, to 4,073.94 after breaking an intraday record of 4,081.37 during the Nasdaq Composite
COMP,
slipped 7.21 points or less than 0.1% to close at 13,698.38, ending a streak of three consecutive wins.
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What is driving the market?
Optimism about the outlook for the business climate grows as more Americans receive vaccine doses and Washington see more spending measures to allow for greater recovery from COVID-related damage.
Investors will wait for a report on the Fed’s two-day March 16-17 meeting due to be released at 2:00 p.m. However, Eastern Time, when policymakers upgraded their forecasts for economic growth and inflation in the US, stressed that accommodative monetary policy would remain in place until 2023.
The market has rolled back on those projections, however, and bond yields rose rapidly this year as it was expected that the accelerating economic recovery from the pandemic could lead to higher inflation.
Market participants expect an average of four quarter percent point increases from the current 0% to 0.25% by the end of 2023.
“We expect the minutes to confirm that the Fed is not considering starting normalization earlier than it has promised, which could cause stock indices to continue trending north,” wrote Charalambos Pissouros, senior market analyst at the JFD Group.
“Although officials have improved their economic and inflation forecasts – inflation is 2.4% this year – Fed Chairman Powell made it clear that this will be temporary and will not meet their standards,” Pissouros wrote.
“He also held on to his guns that it is too early to talk about rejuvenation [quantitative easing]”But some skeptics expect the Fed to propose plans to curtail its asset purchase program already at the end of this year.
A surge in bond yields has eased somewhat with the yield on 10-year Treasury bills
TMUBMUSD10Y,
at around 1.65% on Wednesday morning from 1.72% on Friday. The decline in benchmark bond yields has helped fuel appetite for technology stocks that have benefited from a low interest regime.
JPMorgan Chase & Co. JPM Chairman and CEO Jamie Dimon published his annual letter to shareholders on Wednesday, offering an optimistic view of the economy.
“I have little doubt that the US economy is likely to boom with excessive savings, new economic cuts, huge deficit spending, more QE, a new potential infrastructure bill, a successful vaccine and euphoria towards the end of the pandemic,” the executive wrote. “This boom could easily last through 2023 as all spending could extend through 2023.”
Which companies are in focus?
-
target
TGT,
+ 0.04% announced on Wednesday a Obligation to spend More than $ 2 billion for black-owned companies by the end of 2025.
- XPO Logistics Inc. XPO said on Wednesday that there are more than 1,400 jobs available in North America as the carrier said it is accelerating hiring to meet growing demand.
-
LumiraDX Ltd., a point-of-care diagnostic testing company, goes public through a merger with Special-Purpose Acquisition Corporation (SPAC). CA Healthcare Acquisition Corp..
CAHCU,
-0.50% ,
in a business with a pro forma enterprise value of approximately $ 5 billion. -
MSC Industrial Direct Co. MSM fell into it Premarket trading Wednesday after the metalworking and maintenance, repair and operations (MRO) company reported a profit for the second quarter of the fiscal year that exceeded expectations but sales declined.
- AppLovin Corp.. APP A manufacturer of software for developers of mobile apps set the conditions for going public on Wednesday. He plans to offer 25 million shares at a price of $ 75 to $ 85 each.
-
Coinbase Global Inc..
COIN,
+ 3.70% As of late Tuesday, there were preliminary first-quarter sales of more than $ 1 billion, surpassing last year’s total, and quarterly earnings of nearly $ 1 billion. The crypto trading platform is expected to launch next week and in the stock markets preliminary results published for the period January-March and guidelines for the full year 2021.
How are other assets?
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The ICE US dollar index DXY, A measure of the currency against a basket of six major competitors, was unchanged at 92.32.
-
The yield on the 10 year Treasury bill TMUBMUSD10Y rose about 1 basis point to 1.69%. Yields and bond prices are moving in opposite directions.
-
Oil futures traded higher According to one report, supplies were lowerwith the US benchmark CL. 1, 37 cents, or 0.9%, at $ 59.70 a barrel on the New York Mercantile Exchange.
-
The gold futures were lower on the June contract
GCM21,
-0.25% $ 6.50 or 0.4% to $ 1,736.50 an ounce at Comex.
-
In Europe the Stoxx 600 index SXXP slipped 0.3% while London’s FTSE 100 UKX jumped 0.7%.
-
In Asia the Shanghai Composite SHCOMP ended 0.1% lower, Hong Kong’s Hang Seng
HSI,
-0.91% closed 0.9% while the Japanese Nikkei closed 225 NIK increased by 0.1%.
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