© Reuters. People wearing masks, after the COVID-19 outbreak, are mirrored on a screen showing stock prices outside a brokerage firm in Tokyo.
Written by Howe Jones
LONDON (Reuters) – Wall Street is preparing to hit a record high on Thursday after reassuring the Federal Reserve that bond-buying support for the economic recovery will not end anytime soon.
E-mini futures rose 0.33% at 4,083 points, beating a record high of 4,092.75 points earlier. Nasdaq futures rose 0.86%.
Minutes of the last meeting of the Federal Reserve, released on Wednesday, showed that members felt the economy was still below target and were in no hurry to cut back $ 120 billion from purchasing bonds per month.
“As long as this message remains consistent, and more importantly, it is standardized, this will have a bigger and bigger impact on revenues,” said Derek Halbene, Head of Research for Global Markets at MUFG.
“This is the key in the market at the moment, as prices seem to have reached a certain degree of equilibrium, and this is what encourages the performance of the stock market. I really can’t see anything on the immediate horizon to make a change in that.”
US Treasury yields are down from 14-month highs, although analysts said markets will test next week when earnings seasons begin in the US.
Weekly jobless claims data is due to be released in the United States at 1230 GMT, and the number of Americans filing for new unemployment benefits is expected to show a decrease in the last week, in another sign of the economy’s recovery from COVID-19.
Fed Chairman Jerome Powell speaks at 1600 GMT at an IMF event and is likely to repeat a cautious outlook.
There was little company news, though shares in Tesla (NASDAQ 🙂 Inc rose nearly 1% after President Joe Biden’s administration proposed a $ 174 billion increase for electric cars.
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Equities in Europe have also reached record levels, buoyed by optimism in Britain about easing lockdown restrictions and supportive expectations from the Federal Reserve and the European Central Bank.
The European Stoxx index, composed of 600 leading companies, rose 0.44 percent, surpassing the highest level at 436.66 points, which it had hit earlier in the session. London Preferred rose 0.4%.
Michael Hewson, chief market analyst at CMC Markets, said: “It looks good because valuations in Europe are much lower than in the US, so there is likely to be more upside. The line with less resistance for European markets is higher.”
“In terms of economic re-opening, there is enough built-in optimism at the moment to push markets up a bit from here, and the Fed has reiterated that it will remain on hold for a while,” said Hewson.
The European Central Bank said in the account of its March 11th meeting, which was published on Thursday, that it is important to provide reassurances that there will be no change in its accommodative monetary policy as long as necessary.
In Asia, the MSCI Asia Pacific Index of broadest stocks outside of Japan rose 0.3% in quiet trade. It’s down 0.3%, not helped by news of the Tokyo governor’s request for emergency measures to stop the spread of COVID-19 infection.
In currencies, it fell to 92.291 from a five-month high of 93.439.
The euro settled at $ 1.1877, after rising to $ 1.1914 overnight after a surprisingly optimistic survey of EU trade activity.
In the commodity market, gold was at $ 1,750 an ounce.
Oil prices plummeted after official figures showed a significant increase in US gasoline inventories, causing concerns about weak demand for crude oil in the world’s largest consumer of this resource at a time of increasing supplies around the world.
And it fell 29 cents to 62.87 dollars a barrel. It lost 44 cents, to $ 59.33 a barrel.
(Additional report by Wayne Cole and Shipwiki Aspect; edited by Larry King)