Stock market aims for another round of records as bulls bank on Fed rate cut

Stock-index futures indicate Wall Street will attempt to push further into record territory Friday, after Federal Reserve Chairman Jerome Powell in two days of congressional testimony bolstered investor expectations for an interest rate cut at the end of the month.

Futures on the Dow Jones Industrial Average YMU19, +0.28% rose 82 points, or 0.3%, to 27,158, while those for the S&P 500 ESU19, +0.20% gained 6.35 points, or 0.2%, to 3,010.25. Nasdaq-100 futures NQU19, +0.19% were 18 points higher at 7,936.75, a gain of 0.2%.

The Dow DJIA, +0.85% on Thursday rose 227.88 points, or 0.8%, to 27,088.08, marking its first close above 27,000. The S&P 500 SPX, +0.23% also pushed back into record territory, advancing 6.84 points, or 0.2%, to end at 2,999.91. The Nasdaq Composite COMP, -0.08% which scored a record close on Wednesday, pulled back, ending 6.49 points lower Thursday at 8,196.04, a loss of 0.1%.

Powell, in Thursday testimony before the Senate Banking Committee, said the U.S. economy is in a “very good place” but had only partly recovered from a “confidence shock” it suffered in May due to the U.S. – China trade war. Powell’s comments on Thursday, and his appearance before a House panel on Wednesday, were seen affirming expectations the Fed will move at its July 30-31 meeting to cut its fed-funds rate by at least a quarter point and to potentially deliver further cuts before year-end.

Powell’s “downbeat tone when reflecting on the economic outlook and inflation combined with his complete lack of desire to correct market expectations, despite a cut being 100% priced in this month, gave investors exactly what they wanted,” said Craig Erlam, senior market analyst at Oanda, in a note.

See: An economy gone ‘mad’? The Fed is going to cut interest rates despite record stock prices, low unemployment

Trade data from China, meanwhile, showed the country’s exports fell last month as external demand softened, while imports showed an even more substantial drop. News reports also noted a widening of China’s trade surplus with the U.S. to $29.92 billion from $26.9 billion in May.

Factory output across the eurozone rose sharply in May, which economists said may be a sign the region’s manufacturing sector is stabilizing after a long slowdown.

The U.S. economic calendar features the June producer-price index at 8:30 a.m. Eastern. Economists surveyed by MarketWatch are looking for a 0.1% drop in wholesale prices following a 0.1% rise in May.

Earnings season gets under way in earnest next week, with a slew of big banks set to kick off the festivities.

Illumina Inc. ILMN, -2.43%  updated its second-quarter guidance Thursday after the close, saying it expects revenue to be $50 million lower than previously thought and below analyst forecasts. Shares in the genetics company fell 15.1% in off-hours trade.

Shares of Milacron Holdings Corp. MCRN, -2.80% rallied 21.4%, after the plastics manufacturer and Hillenbrand Inc. HI, -0.94%  announced that Hillenbrand would acquire the firm in a $2 billion cash and stock deal, which valued Milacron at a 33.5% premium to Thursday’s closing price.

Accenture Plc ACN, +1.54%  said late Thursday that its board had Julie Sweet the company’s new chief executive officer, and that David Rowland, interim chief executive officer, has been appointed executive chairman. Shares rose 1.5% in premarket action.

The yield on the 10-year Treasury note TMUBMUSD10Y, -0.42%  was rising for the fourth-straight day, up nearly one basis point to 2.134%.

In Asia, stocks closed higher Wednesday, with the China CSI 300 000300, +0.62%  adding 0.6%, Japan’s Nikkei 225 NIK, +0.20%  rising 0.2% and Hong Kong’s Hang Seng index HSI, +0.14%  advancing 0.1%. European shares were also higher, as shown by the 0.2% rise in the Stoxx Europe 600 SXXP, +0.14%  .

In commodities markets, crude oil prices CLQ19, +0.18%  were edging higher, along with gold GCQ19, -0.11% The U.S. dollar DXY, +0.01%  , meanwhile, inched lower against its peers.

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