The Dow Jones closed a whisker below 32,000 on Wednesday night, spurred on by Jerome Powell’s reassurances that the incoming stimulus package won’t over-juice inflation, and that the Federal Reserve is committed to giving the US economy the help it needs.
The addition of more than 400 points puts the Dow in a primo position this Thursday – even a timid, 0.2% open, as forecast, will see it hit the 32,000 milestone. Unthinkable 11 months ago to the day, when it neared 18,000 in the aftermath of the first wave of pandemic panic.
The European markets didn’t take the ball and run with it on Thursday. Nevertheless, it was a uniformly green, if meek, start to trading.
With GBP/USD up 0.2%, but short of yesterday’s $1.42 intraday highs, and the pound down 0.2% against the euro, the FTSE produced a bland 0.3% increase after the bell. That was, however, enough to lift it to a one-week peak, around 20 points shy of 6,700.
The DAX, which has had quite the turbulent week, could only add 0.1%, keeping it a fraction of a fraction away from 14,000. The CAC, on the other hand, was comparatively energetic, jumping past 5,800 as it rose 0.4%.
There are a couple of pieces of data that could undermine the Dow’s recent gains this afternoon – but only if investors are willing to listen.
On the positive side, the second look at America’s Q4 GDP is expected to see a slight revision, from 4.0% to 4.2% at the annualised rate. Potentially to the negative is the weekly jobless claims reading. Though forecasts have it falling from 861,000 to 828,000, it has come in higher than analysts’ estimates for the past 2 weeks in a row, and risen week-on-week for the last 3.
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