S&P eyes fresh record as market digests Fed outlook

So yesterday’s news from the Federal Reserve arguably wasn’t what many market participants had been expecting, but bullish comments over the health of the broader economy appear to have been sufficient to maintain the upbeat sentiment. Opinions across the Fed remain divided as to where monetary policy will go next, the market is adamant that a cut is coming, but so long as the economy continues to grow then support for stocks remains in play. To illustrate, the weight of conviction means that the S&P 500 is currently seen as opening above its previous record closing high, although the big question many are asking now is what Donald Trump will make of the situation.

The president hasn’t held back in his criticism of the Fed for failing to ease off on monetary policy, depreciating the US Dollar and in turn helping exports. This would likely see inflation spike too, but the short term view of politicians doesn’t align with the longer term stance needed by policymakers and there’s now emerging speculation Donald Trump may seek to remove Jerome Powell. If this does happen, then a degree of panic is probably to be expected as the market reacts to such political engineering. Economic news is otherwise relatively thin on the ground today, but a better understanding of what happens next at the Fed – and its relationship with the White House – will be closely followed.

Ahead of the open, the market is calling the DOW to open up 166 at 26670 and the S&P up 20 a 2947.