Stocks Move To New Highs As Traders Stay Optimistic

Stocks Set To Open At All-Time High Levels

S&P 500 futures are gaining ground in premarket trading as traders remain optimistic after Fed’s decision to reduce the pace of asset purchases by $15 billion per month.

As usual, Fed Chair Jerome Powell managed to calm markets and promised that rates will stay low. Bond traders increased purchases of U.S. government bonds, and the yield of 2-year Treasuries moved from 0.50% to 0.43%. The yield of 10-year Treasuries also moved lower.

Lower yields provided additional support to stocks, which moved to new highs and look ready to continue the rally today.

Initial Jobless Claims Decline To 269,000

U.S. has just released Initial Jobless Claims and Continuing Jobless Claims reports. Initial Jobless Claims report indicated that 269,000 Americans filed for unemployment benefits in a week while analysts expected that they would total 275,000.

Continuing Jobless Claims report also exceeded analyst expectations as Continuing Jobless Claims decreased from 2.24 million to 2.11 million compared to analyst consensus of 2.12 million.

It remains to be seen whether better-than-expected reports will provide additional support to stocks as many traders would prefer to wait for the key Non Farm Payrolls report which will be published tomorrow.

WTI Oil Rebounds Ahead Of OPEC+ Decision

WTI oil received strong support near the $80 level and moved back above the $82 level ahead of OPEC+ meeting.

Today, OPEC+ members will meet to discuss their supply policy. Currently, analysts expect that the group will confirm that it will increase supply by 400,000 barrels per day (bpd) on a monthly basis.

U.S. President Joe Biden has recently called OPEC+ to increase oil production, but this call is unlikely to influence decision making at the organization. While OPEC+ members are willing to increase production to provide support to their budgets, they fear that boosting production at a fast pace may destabilize oil markets and make them vulnerable to coronavirus-related risks.

For a look at all of today’s economic events, check out our economic calendar.