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U.S. equity futures moved higher again Wednesday as markets regained their end-of-year optimism while eyeing another round of labor market data and key public remarks from Federal Reserve Chairman Jerome Powell later in the session.
Stocks ended higher on Tuesday, with both the S&P 500 and the Nasdaq grinding out modest advances to reach fresh all-time highs as investors looked to today’s Powell speech, and further towards Friday’s November jobs report, to get a read on the central bank’s rate path.
The market’s broader bullish tone, with the S&P 500 now up for ten of the past eleven sessions, is being powered by the prospect of a business-friendly administration under President-elect Donald Trump, a resilient economy and the profit-boosting effects of the new AI investment wave.
That has put both this week’s job data, which includes payroll processing group ADP’s National Employment report prior to the opening bell, as well as Powell’s afternoon speech, in sharp focus.
Solid employment data that doesn’t stoke inflation concerns could keep the Fed on track for its end-of-year rate cut, adding further support for stock gains into the final weeks of the year.
“Market momentum could continue [in December] for stocks as historically it has been a good month for stock market seasonals,” said George Smith, portfolio strategist for LPL Financial. “These strong returns are historically often back-end loaded, hence the ‘Santa Claus Rally’ market axionym, that describes the idea that the final few days of December are a strong period for stocks.”
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Heading into the start of the trading day on Wall Street, futures contacts tied to the S&P 500 suggest a 14 point opening bell gain while those linked to the Nasdaq are priced for a 120 point bump.
The Dow Jones Industrial Average is called 200 points higher thanks in part to a 13.5% surge for Salesforce (CRM) , which posted stronger-than-expected third quarter earnings and lifted its full-year revenue forecast.
In Europe, markets were higher heading into what is likely to be successful ‘no confidence’ vote in France’s parliament that will topple Prime Minister Michel Barnier’s government and deepen the country’s budget crisis.
The euro is trading just under 1.05 to the US dollar as all await the vote in the French National Assembly. Risk spreads are relatively calm so far this morning. #economy #markets #france #currency #trading. pic.twitter.com/3qyGiImIGA
— Mohamed A. El-Erian (@elerianm) December 4, 2024
The regional Stoxx 600 benchmark was last marked 0.1% higher in mid-day Frankfurt trading, while Britain’s FTSE 100 slipped 0.37% in London.
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Overnight in Asia, South Korea’s KOSPI index fell 1.44% in Seoul following yesterday’s martial law debacle that is likely to lead to renewed impeachment proceedings against President Yoon Suk Yeol.
The region-wide MSCI ex-Japan benchmark was marked 0.12% higher into the close of trading, with the Nikkei 225 rising 0.07% by the end of the session in Tokyo.
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