Stocks heard what they wanted to hear from Powell, futures higher

US stocks set to erase yesterday’s decline

US equities swooned late yesterday but a combination of good news will boost share prices today.

The latest is Powell, who emphasized that the Fed will provide advance notice before announcing a decision to make changes in Fed policy. There was no hint of a rush to hike and that’s what the market wanted.

Secondly, Democrats appear to be making progress on a $3.5 trillion infrastructure package and the the bipartisan $600B deal is also grinding forward. It’s far from a done deal but committees announced the $3.5T deal late yesterday.

Thirdly, energy companies will cheer the removal of the tail risk of OPEC+ falling apart after reports on a Saudi-UAE deal.

Futures implied open:

  • S&P 500 +18
  • DJIA +108
  • Nasdaq +103
  • Russell 2000 +16

Meanwhile, the US dollar continues to slacken across the board. I think today is setting up as a watershed in the reflation trade.

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