S&P 500 futures are gaining ground in premarket trading as traders bet that continued support from the Fed in combination with President Biden’s spending plans will boost the economy and push the market to new highs.
Yesterday, the Fed left the interest rate unchanged and stated that it was not thinking about reducing asset purchases. Fed’s message was dovish as usual but the market’s initial reaction was muted. Treasury yields continued to move higher, indicating that bond traders remained concerned about inflation.
Today, traders are more optimistic. Strong reports from big names like Apple and Caterpillar also boost market mood. While it remains to be seen whether President Biden will be able to realize his spending plans in their current form, it is already clear that another massive stimulus is coming, which is bullish for stocks.
Initial Jobless Claims Decline From 566,000 To 553,000
The U.S. has just released Initial Jobless Claims And Continuing Jobless Claims reports. Initial Jobless Claims report indicated that 553,000 Americans filed for unemployment benefits in a week. Analysts expected that Initial Jobless Claims would total 549,000.
Continuing Jobless Claims increased from 3.65 million (revised from 3.67 million to 3.66 million compared to analyst consensus of 3.61 million.
Both reports were mostly in line with the analyst consensus and will likely have little impact on market dynamics during today’s trading session.
GDP Grew By 6.4% In The First Quarter
The U.S. has also released GDP Growth Rate report for the first quarter. The report indicated that GDP increased by 6.4% on a quarter-over-quarter basis compared to analyst consensus which called for growth of 6.1%. The U.S. economy continues to rebound at a fast pace, supported by huge stimulus provided by the government and the Fed.
Today, traders will also have a chance to take a look at Pending Home Sales data for March. Analysts expect that Pending Home Sales increased by 5% month-over-month in March after declining by 10.6% in February.