U.S. Stocks May Extend Yesterday’s Rally In Early Trading

U.S. Stocks May Extend Yesterday’s Rally In Early Trading

December 23, 2021

Stocks are likely to move to the upside in early trading on Thursday, extending the late-day rally seen in the previous session. The major index futures are currently pointing to a higher open for the markets, with the Dow futures up by 208 points.

The markets may continue to benefit from a positive reaction to the Federal Reserve’s highly anticipated monetary policy announcement on Wednesday.

While the Fed accelerated the pace of tapering its asset purchases and signaled as many as three interest rate hikes next year, traders seem relieved the central bank was not even more hawkish.

Analysts have also suggested the Fed announcement removed some uncertainty about the outlook for monetary policy, allowing traders to focus on economic and corporate fundamentals.

On the U.S. economic front, the Labor Department released a report showing a modest rebound in first-time claims for unemployment benefits in the week ended December 11th.

The Labor Department said initial jobless claims rose to 206,000, an increase of 18,000 from the previous week’s revised level of 188,000.

Economists had expected jobless claims to inch up to 195,000 from the 184,000 originally reported for the previous week.

The slightly bigger than expected increase came after jobless claims fell to their lowest level since 1969 in the previous week.

A separate report from the Commerce Department showed housing starts and building permits both surged by much more than expected in the month of November.

Meanwhile, the Philadelphia Federal Reserve released a report showing a substantial slowdown in the pace of growth in regional manufacturing activity in December.

Just before the start of trading, the Fed is due to release its report on industrial production in the month of November. Industrial production is expected to increase by 0.7 percent in November after jumping by 1.6 percent in October.

Reflecting a positive reaction to the Fed’s highly anticipated monetary policy announcement, stocks showed a substantial turnaround over the course of the trading session on Wednesday after moving to the downside early in the day.

The major averages moved sharply higher following the Fed announcement, largely offsetting the pullback seen on Monday and Tuesday.

After tumbling as much as 1.2 percent in early afternoon trading, the tech-heavy Nasdaq soared 327.94 points or 2.2 percent to 15,565.58. The Dow also jumped 383.25 points or 1.1 percent to 35,927.43, while the S&P 500 surged 75.76 points or 1.6 percent to 4,709.85.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Thursday. Japan’s Nikkei 225 Index spiked by 2.1 percent, while China’s Shanghai Composite Index advanced by 0.8 percent.

The major European markets have also moved to the upside on the day. While the German DAX Index has jumped by 1.5 percent, the French CAC 40 Index is up by 1.2 percent and the U.K.’s FTSE 100 Index is up by 1 percent.

In commodities trading, crude oil futures are climbing $0.52 to $71.39 a barrel after inching up $0.14 to $70.87 a barrel on Wednesday. Meanwhile, after falling $7.80 to $1,764.50 an ounce in the previous session, gold futures are jumping $22.50 to $1,787 an ounce.

On the currency front, the U.S. dollar is trading at 114.12 yen versus the 114.04 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.1348 compared to yesterday’s $1.1289.

Source: Read Full Article