Dow Futures Rise 70 Points – Powell Keeps Policies Supportive

U.S. stocks are seen edging higher Thursday, continuing the recent strong rally after Fed chief Jerome Powell reaffirmed that the central bank’s monetary policy will remain supportive for some time yet.

At 7:05 AM ET (1205 GMT), the Dow futures contract was up 70 points, or 0.2%, S&P 500 futures traded 10 points, or 0.3%, higher, and Nasdaq 100 futures climbed 57 points, or 0.4%.

The Dow Jones Industrial Average closed at an all-time high Wednesday, while the S&P 500 and the Nasdaq Composite also hit record highs intraday before closing lower. All three indices are on track to register their second positive week in a row.

Investors purchased $43.1 billion in equity funds in the week to Feb. 10, the most since at least mid-March 2019, Refinitiv Lipper data showed.

Stock markets have benefited from large amounts of financial largesse, both fiscal and monetary, as central banks and governments sought to try and support their Covid-hit economies.

Federal Reserve Chairman Jerome Powell stated Wednesday that the central bank’s accommodative policies still need to stay in place for a considerable time, saying the employment picture is a “long way” from where it needs to be.

Additionally, talks are still underway in Washington over President Joe Biden’s $1.9 trillion stimulus package, although Congress currently seems to be fully focusing on former President Donald Trump’s second impeachment trial.

The S&P 500 index can still rise 10% from its current levels, despite high valuations, with improving economic growth and easy monetary policy helping to extend its rally, said Geneva-based Pictet Group.

This earnings season continues Thursday, with PepsiCo, Kraft Heinz and Kellogg among the names due to provide numbers before the market opens. Walt Disney and Expedia are scheduled to report after the bell.

Other companies in focus include Uber, after the ride-hailing company released its latest results after the close Wednesday, and Tilray, after the Canadian cannabis company became the focus of the same Reddit group that pushed GameStop higher.

On the economic data slate, the weekly initial jobless claims data are due for release, at 8:30 AM ET (1330 GMT), with a drop to 757,000 expected, from 779,000 the previous week.

Oil prices weakened Thursday, as traders banked profits after a strong rally, despite a larger than expected drop in U.S. crude supplies raised hopes of a recovery in demand in the world’s largest consumer.

The U.S. Energy Information Administration recorded late Wednesday a draw of 6.64 million barrels for the week to Feb. 5, with crude stocks falling for a third straight week to their lowest level since March. A small addition had been expected.

The international benchmark Brent contract fell 0.7% to $61.02, after having risen for the previous nine sessions, its longest sustained period of gains since January 2019. U.S. crude futures traded 0.7% lower at $58.30 a barrel, with Wednesday having seen its eighth daily rise.

Elsewhere, gold futures rose 0.1% to $1,843.70/oz, while EUR/USD traded 0.1% higher at 1.2130.

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