FXTM information and reviews
FXTM
93%
IronFX information and reviews
IronFX
92%
Libertex information and reviews
Libertex
91%
FXCC information and reviews
FXCC
90%
Markets.com information and reviews
Markets.com
89%
FxPro information and reviews
FxPro
88%
EUR/USD
1.1733
BTC/USD
42 294.79
GBP/USD
1.3640
USD/JPY
109.4985
USD/CHF
0.9224
USD/CAD
1.2799
EUR/JPY
128.4704

Dovish Fed and big earnings surprises send US stocks to new records


29 April 2021

Whoever thought the robust economic figures produced by the US economy over the past few weeks would alter the Fed’s thinking, even slightly, was totally mistaken. The economy is firing on all cylinders with employment, consumer spending, manufacturing, services and the housing sector all exhibiting solid gains. Still, the Fed is steadfast in its attempt to achieve the Committee’s target of maximum employment and inflation at the rate of 2% over the long term.

The FOMC is not even considering talking about slowing the $120 billion in asset purchases per month, suggesting that any tapering will not likely occur before the end of the year at the earliest. While Powell admits the Fed’s policy is leading to some frothiness in capital markets, he doesn’t see systematic financial stability risk.

The key takeaway from yesterday’s FOMC meeting is that US monetary policy is going to remain extremely loose, no matter how hot some parts of the economy become. While the Fed did not disappoint investors, equities barely moved after Powell’s speech as markets had expected very little action. Currently trading at around 30 times price to earnings, the S&P 500 needs more than just an easy monetary policy to keep bulls in charge.

The earnings season has been remarkable so far. Out of the 218 S&P 500 companies who have announced results, 85% have managed to beat profit estimates and 78% on revenue. Surprisingly though, the firms who managed to beat on the bottom line declined -0.2% on average on the day of their earnings announcement. Many stocks like Tesla, Microsoft and AMD are failing to gain traction following positive surprises. In fact, companies need to deliver substantial upside surprises to get investor’s attention. That’s what Alphabet, Apple and Facebook managed to deliver this week and they are the stocks driving equity benchmarks to new record highs. 

The dollar remains the most unloved currency for the month falling to a nine-week low early today.  The reflation trade is clearly ongoing bolstered by extremely loose monetary policy, and with another $1.8 trillion in spending announced by US President Joe Biden, the budget deficit has only way to go, and that’s up. However, the US remains the best performing developed economy and this will be reflected in today’s GDP report.  For the dollar to regain strength, we need to see interest rates differentials widening again, but this is not happening at the moment.

#source

Related

Trading the BoE and FOMC meetings
Trading the BoE and FOMC meetings

The FOMC and the BoE meeting are firmly in our sights now, and positions and exposures will need to be managed accordingly. Certainly, the FOMC meeting could...

22 Sep 2021

Stocks bounce back after Evergrande panic
Stocks bounce back after Evergrande panic

As investors increasingly liken the Evergrande crisis with the collapse of the Lehman Brothers in 2008, they remain in the dark about the Chinese government's intentions...

21 Sep 2021

Oil Was Put on Hold
Oil Was Put on Hold

The oil price is falling after rallying before. Early in another September week, Brent is trading at $74.50 and has a lot of room to correct. The strong greenback...

20 Sep 2021

Dollar starts Fed week on front foot, stocks hit by Evergrande fallout
Dollar starts Fed week on front foot, stocks hit by Evergrande fallout

Fears of global contagion from the worsening crisis in China's property sector continued to weigh heavily on sentiment at the start of trading on Monday as markets...

20 Sep 2021

Dollar jumps, gold slumps, stocks nervous
Dollar jumps, gold slumps, stocks nervous

Worries that the US consumer is rolling over were dealt a major blow yesterday after the nation’s retail sales for August overpowered some gloomy forecasts. The retail sales...

17 Sep 2021

Energy is the play: how we get to $100 crude
Energy is the play: how we get to $100 crude

Natural gas futures in Europe and the UK are flying, while our natural gas (NG) CFD (the underlying is traded on the NYMEX) pushed over $5.60 and into 7-year highs...

16 Sep 2021


Forex Forecasts

OctaFX information and reviews
OctaFX
86%
HotForex information and reviews
HotForex
85%
XM information and reviews
XM
80%
FXCM information and reviews
FXCM
79%
Vantage FX information and reviews
Vantage FX
78%
Moneta Markets information and reviews
Moneta Markets
77%

© 2006-2021 Forex-Ratings.com

The usage of this website constitutes acceptance of the following legal information.
Any contracts of financial instruments offered to conclude bear high risks and may result in the full loss of the deposited funds. Prior to making transactions one should get acquainted with the risks to which they relate. All the information featured on the website (reviews, brokers' news, comments, analysis, quotes, forecasts or other information materials provided by Forex Ratings, as well as information provided by the partners), including graphical information about the forex companies, brokers and dealing desks, is intended solely for informational purposes, is not a means of advertising them, and doesn't imply direct instructions for investing. Forex Ratings shall not be liable for any loss, including unlimited loss of funds, which may arise directly or indirectly from the usage of this information. The editorial staff of the website does not bear any responsibility whatsoever for the content of the comments or reviews made by the site users about the forex companies. The entire responsibility for the contents rests with the commentators. Reprint of the materials is available only with the permission of the editorial staff.
We use cookies to improve your experience and to make your stay with us more comfortable. By using Forex-Ratings.com website you agree to the cookies policy.