(Bloomberg) — U.S. stock futures advanced as traders were reassured by the Federal Reserve’s signal that there were no plans to raise interest rates and looked forward to the Apple Inc.’s upcoming earnings
Most read on Bloomberg
S&P 500 contracts climbed 0.7% as Apple, Amazon.com Inc. and Nvidia Corp. posting slight gains in pre-market trading. The yen was the center of currency attention, recording another day of sharp swings amid speculation that Japanese authorities had intervened to prop up the currency.
Markets are celebrating that the Fed has taken a more dovish stance than some had expected, even after a series of statistics highlighted persistent inflationary pressures. Chairman Jerome Powell said it was unlikely the central bank’s next move would be a rate hike, saying authorities would need convincing evidence that policy is not tight enough to bring inflation back toward the 2% target.
“Overall, it’s a bullish message for the markets,” said Benjamin Melman, chief investment officer at Edmond de Rothschild Asset Management. “We have confirmation that Powell does not want to raise rates.”
Additional information on the health of the U.S. economy will come from early jobless claims and factory orders on Thursday, although the main focus will be on April nonfarm payrolls data, due at the end of the week. A Bloomberg Economics model shows the unemployment rate unchanged at 3.8%. This suggests that “recruitment likely remains too strong for the Fed,” economists Andrej Sokol and Scott Johnson wrote in a note.
Apple’s figures, expected after the U.S. market close, will give investors a better idea of how the iPhone maker is coping with falling sales, driven in part by a weak Chinese market.
“Earnings look pretty resilient and pretty constructive on the equity side,” John Woods, CIO for Asia Pacific at Lombard Odier, said in an interview on Bloomberg Television. “Right now, it’s very much an American story.”
Ruthless Investors Want Windfall Profits After Record Rally
In Europe, stocks saw slight swings amid mixed corporate reports. Drugmaker Novo Nordisk A/S fell after disappointing results and shipping giant Moller-Maersk A/S retreated. Shell Plc rose after the energy producer posted a higher profit and announced a $3.5 billion share buyback.
Yen Slide
The Japanese yen slipped as much as 1.1% against the dollar, following a late rise Wednesday in New York. The new decline suggests investors are skeptical about Japanese authorities’ ability to prevent currency weakening, given the large interest rate differential between the country and the United States.
The Hang Seng Index jumped more than 2%, putting it on track to enter a technically bull market. Pegging Hong Kong’s currency to the greenback strengthens its safe-haven appeal amid the threat of higher and longer-lasting U.S. interest rates.
In the commodities sector, oil recovered its losses from Wednesday and gold advanced.
Key events this week:
-
Factory orders in the United States, first unemployment claims, trade,…
