Fed Chair Powell’s Dovish Sentiment And U.S.-China Relations Lift Benchmarks
Anna Carpenter
Thu, 02/11/2021 – 10:54

Blue Line Futures

Publication Date

Equity Index futures

Wednesday’s Close

E-mini S&P 500 Futures (March): Settled at 3903, down 2.50

E-mini Nasdaq-100 Futures (March): Settled at 13,643.50, down 36.75

What weakness? Fed Chair Jerome Powell and a Biden-Xi call have lifted U.S. benchmarks back near record levels. Powell was dovish in an interview yesterday and reaffirmed that the Fed isn’t even thinking about removing accommodative policies. He noted the real Unemployment Rate in U.S. is closer to 10% and echoed the soft CPI data, saying there’s no sustained rise in inflation. Furthermore, he reiterated that more stimulus, both fiscal and monetary, is needed. 

Upon yesterday’s waves of selling, the S&P and Nasdaq held our levels of major 3-star support, and this paved the way for a bullish response to Powell’s dovishness.

Tailwinds were added overnight by the first conversation between President Biden and China’s President Xi. Although we aren’t impressed by the details, many media outlets have hailed the communication as a solid first step forward. Still, reports point to President Xi keeping President Biden’s attempts to address China’s inhumane policies across the Xinjiang province, Hong Kong, and Taiwan at arms lengths, calling them internal affairs. 

As we know, the market zeroes in on the positives during bullish waves and the negatives during bearish ones. The market’s focus here is and has been positive, given the status of U.S.-China relations during the previous administration.

U.S. Jobless Claims were in focus this morning. Both Weekly Initial Claims and Continuing Claims came in higher than expected and revisions worsened last week’s solid read. At 10:00 a.m. CT, the Federal Reserve released their semi-annual Monetary Policy Report to Congress. Last summer, this marked the adoption of symmetrical inflation targeting. At noon CT, Treasury auctions 30-year Bonds, and at 1:00 p.m. CT we look to the Federal Budget report.

Pepsi beat earnings forecasts this morning and the stock is edging higher. We look to Disney after the bell. Uber has been on a tear recently and the stock is coming in following its report after the bell yesterday. Illumina and Expedia are 2 we’re watching after today’s close.

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