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Stock index futures rallied once more on Friday, pointing to the fourth straight session of positive factors, as investor sentiment remained upbeat within the wake of the Federal Reserve’s dovish pivot this week.
S&P futures (SPX) +0.3%, Nasdaq 100 futures (NDX:IND) +0.3% and Dow futures (INDU) +0.3%.
“Markets are celebrating the Fed’s view of rate cuts on the horizon with stocks higher, yields lower, and the dollar weaker,” stated José Torres, Senior Economist at Interactive Brokers. “But I believe the pivot is a mistake. The resulting optimism among investors has caused financial conditions to loosen dramatically as equity and commodity prices soar and credit spreads tighten.”
“As portfolio values climb, households’ perception of having increased wealth is likely to spark another consumer spending spree, thereby supporting inflation,” Torres warned.
Yields continued to say no. The 2-year Treasury yield (US2Y) fell 3 foundation factors to 4.37%, whereas the 10-year yield (US10Y) fell 2 foundation factors to three.91%. This week, the 10-year yield fell under 4% for the primary time since August.
Friday’s financial calendar is mild, with industrial manufacturing information due later within the morning.
