June 19, 2024

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Futures Pointing To Continued Strength On Wall Street

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Stocks are likely to move mostly higher in early trading on Thursday, extending the upward move seen over the past several sessions. The major index futures are currently pointing to initial strength on Wall Street, with the S&P 500 futures up by 0.8 percent.

Optimism about the outlook for interest rates may contribute to continued strength on Wall Street following the Federal Reserve’s monetary policy announcement on Wednesday.

The Fed left interest rates unchanged for the third time in the past four meetings, leading to optimism that the central bank is done raising interest rates.

Treasury yields moved notably lower on Wednesday and are seeing further downside this morning, potentially adding to the buying interest.

“Many Fed officials in recent weeks have indicated that rates were high enough now that they could pause,” said Mortgage Bankers Association Chief Economist Mike Fratantoni. “Inflation is slowing, but not yet back to the 2% target range. This is the most important metric the Fed is watching right now.”

“Even though third-quarter economic growth came in quite strong, and several job market indicators continue to show strength, so long as inflation continues to come down, the Fed is likely to pause at this level for some time,” he added. “We expect its next move will be a cut in next year’s second quarter.”

The latest economic data may add to the optimism about rates, with the Labor Department releasing a report showing an unexpected uptick in first-time claims for U.S. unemployment benefits in the week ended October 28th.

The report said initial jobless claims crept up to 217,000, an increase of 5,000 from the previous week’s revised level of 212,000.

Economists had expected jobless claims to come in unchanged compared to the 210,000 originally reported for the previous week.

A separate report from the Labor Department also showed an unexpected decrease in unit labor costs in the third quarter.

The Labor Department said unit labor costs fell by 0.8 percent…

2023-11-02 08:54:58

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