 "US Federal Reserve")
US stocks were mixed and Treasuries held modest losses after the Federal Reserve kept rates pinned near zero and maintained the pace of bond purchases as was widely expected.
The Fed strengthened its view of the economy and said that recent increases in inflation looked “transitory,” reassuring investors that the central bank is in no hurry to tap the brakes on growth. The dollar was lower, the 10-year Treasury rate held near 1.65% and gold was little changed.
“No news is good news as far as the market is concerned because it means the Fed will remain accomodative for the near future,” said Ellen Hazen, portfolio manager and principal at F.L.Putnam Wealth Management. “This is a goldilocks Fed. It is exactly what the equity markets are looking for.”
The Fed decision came as investors parsed the latest batch of corporate earnings reports. Alphabet Inc. rose toward a record after its results showed a surge in ad sales. Microsoft Corp. was among the biggest drags, dropping to a three-week low after the software maker failed to deliver the blockbuster results some analysts were looking for. The S&P 500 was little changed while the Nasdaq 100 fell.
With stock valuations about 25% above their five-year average, tnvestors have been searching for new catalysts to sustain the bull market momentum.
A string of encouraging data and rapid vaccination progress have boosted optimism about growth prospects in the developed world, reviving the so-called reflation trade in recent days. A release Thursday may show the U.S. gross domestic product increased an annualized 6.8% in the first quarter.
Crude-oil futures rose after OPEC+ expressed confidence in the demand outlook with plans to boost supply, even India’s raging Covid-19 crisis is causing near-term pressure.
Here are some key events to watch this week:
• Joe Biden makes his first address as president to a joint session of Congress Wednesday
• U.S. GDP Thursday is forecast to show growth strengthened in the first quarter
These are some of the main moves in markets:
Stocks
• The S&P 500 was little changed as of 2:35 p.m. New York time
• The Nasdaq 100 fell 0.2%
• The Dow Jones Industrial Average fell 0.3%
• The MSCI Emerging Markets Index rose 0.4%
Currencies
• The Bloomberg Dollar Spot Index fell 0.2%
• The euro was little changed at $1.2109
• The British pound was little changed at $1.3924
• The Japanese yen fell 0.1% to 108.84 per dollar
Bonds
• The yield on 10-year Treasuries advanced one basis point to 1.64%
• Germany’s 10-year yield advanced two basis points to -0.23%
• Britain’s 10-year yield advanced two basis points to 0.80%
Commodities
• West Texas Intermediate crude rose 1.2% to $64 a barrel
• Gold futures fell 0.2% to $1,776 an ounce
