S&P 500 futures have managed to get back to the neutral territory in premarket trading despite traders’ worries that the Fed may be forced to adjust the pace of asset purchases in 2021 due to high inflation.
Yesterday, traders had a chance to take a look at FOMC Minutes from the last Fed meeting. FOMC Minutes indicated that some participants believed that the Fed should start discussions about the pace of asset purchases in the upcoming meetings.
The support from the Fed served as one of the main bullish catalysts for the market since the crash in 2020 which was caused by coronavirus crisis. In this light, the reduction of this support may put significant pressure on stocks.
At the same time, it remains to be seen whether the market will remain focused on this risk as there is plenty of liquidity available, and there are many traders and investors who are willing to buy any notable pullback.
Continuing Jobless Claims Increased To 3.75 Million
The U.S. has just released Initial Jobless Claims and Continuing Jobless Claims reports. Initial Jobless Claims report indicated that 444,000 Americans filed for unemployment benefits in a week. Analysts expected that Initial Jobless Claims would total 450,000, so the report was mostly in line with the analyst consensus.
Interestingly, Continuing Jobless Claims increased from 3.64 million (revised from 3.66 million) to 3.75 million compared to analyst consensus of 3.64 million.
The situation in the job market continues to stabilize, but traders will likely pay more attention to Continuing Jobless Claims reports in the upcoming weeks after the surprising increase.
WTI Oil Remains Under Pressure
WTI oil settled below the $63 level and is testing the support at the 50 EMA at $62.50 as oil traders remain worried about the consequences of the potential nuclear deal between U.S. and Iran.
Recent reports indicated that U.S. and Iran moved closer to the deal which was abandoned by U.S. during the presidency of Donald Trump. If U.S. and Iran manage to reach consensus, U.S. will lift some sanctions and Iran will be able to export more oil, which will be bearish for the oil market.