3 ZEEL
Market Action – Thursday, March 7th 2024
# Wall Street climbs and ends with modest gains in Wednesday’s trade despite Powell sticking to his recent script, reiterating that the Fed needs more evidence that inflation is easing before rate cuts begin. "We are just being careful," Powell stated.
# The Big Positive Catalyst: Powell did say that lowering the federal funds rate will "likely be appropriate" later this year if the Fed can see more proof that inflation is "moving sustainably" toward its 2% target.
# Gift Nifty is indicating a comfortably higher open for our stock markets as and that’s in line with our call of the day which suggests momentum is likely to build as the session wears on, probably Nifty will end the day with a bang.
GLOBAL UPDATE:
GIFT Nifty (+63, 22655)
Dow Future (-31, 38631)
Nikkei (+93, 40185)
Hang Seng (-20, 16418)
Dow Jones (+76, 38661)
Nasdaq (+92, 16032)
Bovespa (+792, 128890).
WHAT EXACTLY HAPPENED AT WALL STREET IN YESTERDAY’S TRADE:
# As of writing, Nikkei 225 Index is flirting above the 40,000 mark, aiming to recoup its Wednesday’s losses and tracking modest gains on Wall Street in overnight trade.
# Federal Reserve chairman Jerome Powell’s semiannual testimony before Congress: Rate cuts likely appropriate this year.
Powell further said "there`s no reason to think that the U.S economy is in or in some kind of short-term risk of falling into recession."
Powell noted that the US economy expanded more than 3% in 2023, nearly twice as fast as what is viewed as its top sustainable growth rate.
# In overnight trade, Wall Street moved sharply higher, as Powell indicated policy rate is likely at its peak.
# Focus now turns to US Nonfarm payrolls to trickle in on Friday, March 8th will be crucial.
# Overnight, the Dow Jones Industrial Average was up about 75 points, or 0.2%. The S&P 500 was up 0.5%. The Nasdaq Composite was up 0.6%.
# The big three indexes pulled back around midday as bond yields recovered somewhat. The 3-indices however managed to snap a two-day losing streak.
# The 10-year Treasury yield was at 4.116% after falling to 4.083%.
# WTI crude oil prices is seen trading firm at $79.35 per barrel.