Fed Chair Powell Comments Support Stock Indexes
STOCK INDEX FUTURES
Stock index futures are sharply higher after Federal Reserve Chair Jerome Powell expressed optimism Sunday that the U.S. economy can begin to recover in the second half of the year, although he acknowledged that it could take more than a year to recover.
Fed Chair Powell said, “We’re not out of ammunition by a long shot” as the Fed could enlarge existing lending programs or begin new ones.
Mr. Powell is due to appear before the Senate Banking Committee tomorrow at 9:00 central time.
The 9:00 May housing market index is expected to be 33.
The technical picture continues to improve for stock index futures.
The U.S. dollar is lower on the belief that the Federal Reserve could do more to stimulate the U.S. economy, especially after Fed Chair Powell’s recent comments.
The British pound is steady despite growing speculation that the U.K. may be next to push interest rates below 0%.
The Japanese yen is lower after a report showed Japan’s economy, the world’s third largest, fell into a recession in the first quarter. The economy shrank an annualized 3.4% in the three months ended March 31 after a 7.3% contraction in the previous quarter. Economists expected a 4.8% annualized contraction. Two consecutive quarters of contraction is one definition of a recession.
INTEREST RATE MARKET FUTURES
Safe-haven longs are being liquidated in light of sharply higher stock index futures, especially at the long end of the curve.
Last week the Federal Reserve said its ’s balance sheet grew to a record $6.98 trillion in the week ended May 13, which is up from $6.72 trillion in the previous week.
The thirty-year Treasury bond futures are in a broadly based congestion pattern, as the main fundamental influences are offsetting.
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