fundamental News - SP500
U.S. stock index futures were higher during early morning trading on
Thursday after the Federal Reserve kept benchmark interest rates
unchanged, while indicating no immediate intention of removing stimulus
Futures contracts tied to the Dow Jones Industrial Average gained
105 points. S&P 500 futures and Nasdaq 100 futures both traded in
Stocks finished higher across the board during regular trading
following the central bank’s commentary. The Dow gained roughly 340
points, or 1%, for its first positive session in five and best day since
July 20. The 30-stock benchmark did close below
its highest levels of the day, however, after advancing more than 500
points at one point.
The S&P advanced 0.95%, also snapping a four-day losing streak
and registering its best day since July 23. The Nasdaq Composite
finished the session 1.02% higher, while the Russell 2000 outperformed
on the session, rising 1.48%.
“If progress continues broadly as expected, the Committee judges
that a moderation in the pace of asset purchases may soon be warranted,”
a statement from the Fed following the meeting read. No timeline was
The central bank implemented a $120 billion per month bond-buying
program last year as the pandemic shuttered the economy. As economic
conditions improve more members of the Federal Open Market Committee now
see the first rate hike happening in 2022.
“The Fed struck a positive tone, acknowledging that the economy is
strong enough to stand on its own two feet and the central bank can
begin removing the monetary stimulus that they’ve been providing since
the beginning of the Covid crisis,” said Chris
Zaccarelli, chief investment officer for Independent Advisor Alliance.
“Although there may be some additional turbulence this fall, we are
constructive on the US economy in general and believe that any dips
would be worth buying as the fundamentals are still sound and recession
appears to be more than a year away at this
point,” he added.
Wednesday’s move was not enough to push stocks into the green for
the week, however. The Nasdaq Composite is down 0.98% over the last
three sessions, while the S&P and Dow have dipped 0.84% and 0.94%,
Some of this week’s weakness is thanks to concerns over heavily
indebted Chinese property developer Evergrande. The company did announce
on Wednesday that its real estate group would make interest payments on
time, which assuaged some fears.
September is also living up to its reputation as a tough period for
stocks, and the three major averages are all down at least 2% for the
“We believe the S&P 500 has further room to run, but one of the
biggest downside risks stems from valuations amid the prospect of
higher yields/ERPs, less liquidity and slower growth,” UBS said in a
recent note to clients.
On Thursday the Department of Labor will release initial jobless claims
number, while several companies are on deck for quarterly updates
including Darden Restaurants which reports before the market opens,
while Nike and Costco Wholesale will provide quarterly
updates once the market closes. Flash estimates for September
Manufacturing PMI and Services PMI will also be released.
expectation today: bullish