ASX 0.1% higher on US optimism, Domino’s dives 19%

Wall St climbed to a record after the Federal Reserve signalled monetary policy will remain accommodative even as the central bank starts reducing its massive bond-buying program this month.

In a feat not seen since January 2018, the S&P 500, the Dow Jones Industrial Average, the Nasdaq 100 and the Russell 2000 closed at their all-time highs for a second straight day.

The S&P 500 rose 0.6% as of 4 p.m. New York time The Nasdaq 100 rose 1.1% The Dow Jones Industrial Average rose 0.3% The MSCI World index rose 0.5%.

The Treasury curve steepened after Fed Chair Jerome Powell sought to stress that tapering doesn’t mean rate hikes are coming soon. He said officials can be patient on tightening, but won’t flinch from action if warranted by inflation. The dollar fell.

Comments by Jerome Powell, US Fed chair, was seen as signalling the strength of the US economy.

Comments by Jerome Powell, US Fed chair, was seen as signalling the strength of the US economy.Credit:Bloomberg

“Powell was very careful not to make any missteps today, sticking carefully to his script that their focus is on tapering, not raising rates,” wrote Seema Shah, chief strategist at Principal Global Investors. “That’s a shame because interest-rate hikes are all that markets want to talk about!”

Traders largely maintained bets on the timing of rate increases from the level they were at before the Fed decision. Money-market derivatives show about 55 basis points of rate hikes by the end of 2022. The first one is seen coming around July, with about a 70 per cent chance it happens the month before, overnight index swaps show.

In late trading, Qualcomm Inc., the world’s largest smartphone chipmaker, gave a stronger-than-expected outlook for the current quarter. Video-game publisher Electronic Arts Inc.‘s revenue forecast was broadly in line with analysts’ estimates. Fox Corp. reported quarterly sales and earnings that beat Wall Street’s expectations.

The Treasury announced the first reduction in its quarterly sale of longer-term debt in more than five years, reflecting diminishing borrowing needs as the wave of pandemic-relief spending ebbs.

U.S. companies added the most jobs in four months, suggesting employers are making progress in filling a near-record number of open positions. The data precede Friday’s monthly employment report from the Labor Department, which is forecast to show that private payrolls increased by 408,000 in October. Service providers expanded at a record pace in October, powered by resilient demand and stronger business activity.

Read More: ASX 0.1% higher on US optimism, Domino’s dives 19%

You might also like