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The Fed Speaks, Wall Street Slumps

Published 02/05/2019, 12:29
Updated 06/07/2021, 08:05

Yesterday’s lack of a dovish bias by the Federal Reserve evidently disappointed equity markets on Wall Street, with the DOW shedding over 200 points as traders digested the news from Jerome Powell. Whilst acknowledging below target inflation, beyond a technical tweak to the rate paid on excess reserves which many have been keen to stress isn’t a policy signal, there were no signs of change on the basis that the underlying economy continues to perform well.

It’s another busy day ahead for earnings news, although attention is now shifting away from the behemoths who have been reporting in recent days. Highlights in the short term are set to include Kellogg (NYSE:K), Expedia (NASDAQ:EXPE) and CBS (NYSE:CBS). Optimism continues to build over a resolution to the US-China trade dispute too, with some reports suggesting progress could be seen by the end of next week.

Again, this has the potential to spark fresh interest on Wall Street, whilst Donald Trump is likely to have something to say over the Fed’s rejection of his plans to aggressive slash borrowing costs, too. Durable goods order data is set for release shortly after the opening bell and this could also provide further support for the Fed’s stance.

Ahead of the open, the market is calling the Dow up 10 at 26440 and the S&P 500 up 1 at 2925.

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