Equities heading to fifth weekly gain following Fed comments
Equities held gains after the Federal Reserve validated bets that it will soon move to easier policy and pushed stock market gauges toward all-time highs.
The Stoxx 600 index rose 0.4% after hitting its highest level since January 2022, on course for a fifth week of gains. S&P 500 futures ticked up 0.3% with the underlying gauge poised for its seven consecutive weekly advance.
The Fed ignited a speculative frenzy this week when it affirmed soft-landing bets that it was ready to declare victory on inflation and shift to rate cuts.
As the week draws to a close, traders still have to contend with the year’s largest quarterly options and futures expiry Friday and its potential to spark volatility. A staggering $3.1 trillion in notional open interest scheduled to either expire or be rolled into the new year, according to according to Tier1Alpha strategists.
A note of caution from Europe’s central bankers that they’re not ready to follow the Fed’s policy pivot damped some of the excitement. European Central Bank Governing Council member Madis Muller said Friday that markets are getting ahead of themselves in betting that the ECB will start cutting interest rates in the first half of next year.
“The contrast between the resilient US economy adopting a dovish stance and faltering European economies holding on to a hawkish position gives the impression that something is amiss,” Ipek Ozkardeskaya, a senior analyst at Swissquote, wrote in a note to clients.
Treasuries were steady after the yield on the 10-year benchmark broke below 4% for the first time since August. The dollar traded in tight range against Group-of-10 peers.
Elsewhere, oil was set to post its first weekly gain in almost two months as the Fed’s latest stance
Read more on investmentnews.com
