Wall Street lurched higher once again yesterday, with both the DOW and the S&P now rapidly closing in on their respective record high closing levels. Conviction in the market that the Fed will aggressively cut interest rates through the second half of the year is driving much of the gains, although as we have previously noted, failure to deliver against expectations here will have the potential to initiate a quick reversal in sentiment.
Corporate news is thin on the ground for the day ahead but the 5% gain for Boeing yesterday is worthy of note and give the stock’s heavy weighting in the index. The aircraft manufacturer secured a big order from IAG for the currently grounded 737 MAX, providing some much needed confidence in the longer term outlook for the company.
The key point for the day ahead however will be the Federal Reserve’s policy statement, due at 8pm BST tonight. To recap, there’s no real expectation that a cut will be seen today, but some strong hints over a reduction in July should be forthcoming.
Ahead of the open, the market is calling the DOW to start up 8 at 26474 and the S&P up 1 at 2919.
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