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U.S. equity futures edged lower in early Thursday trading, while Treasury yields and the dollar eased to reflect a more cautious market outlook for Federal Reserve rate cuts as the economy continues to outperform forecasts.Â
Stocks ended with a triple set of record highs last night, with the S&P 500 printing its 56th all-time peak of the year and extending its 2024 advance to just under 27%, as the market’s bullish tenor into the final month of the year continued to support risk appetite.Â
With the third quarter earnings season largely completed, and few corporate events on the calendar between now and the end of the year, markets are firmly focused on macro conditions and the prospect for Federal Reserve rate cuts over the coming months.
The strength of the broader economy, which the Atlanta Fed’s GDPNow forecasting tool suggests is growing at a 3.2% pace, formed part of the defense of the Fed’s rate policy during Chairman Jerome Powell’s appearance at the New York Times DealBook summit yesterday in Manhattan.
“The U.S. economy is in very good shape and there’s no reason for that not to continue,” Powell said. “The downside risks appear to be less in the labor market, growth is definitely stronger than we thought, and inflation has come in a little higher.”
Markets are still expecting a final 2024 rate cut from the Fed later this month in Washington, but have pared back bets on follow-on moves over the first half of next year as inflation pressures, tied to the firmer growth outlook, continue to linger.
Benchmark 2-year Treasury note yields, the most-sensitive to interest rate forecasts, were marked 3 basis point lower overnight at 4.184% while 10-year notes held steady at 4.209%.
The U.S. dollar index, which tracks the greenback against a basket of six global currencies, was marked 0.12% lower at 106.168.
Related: What’s next for stocks after S&P 500 record high?
Risk appetite was also in evidence with the overnight surge in Bitcoin, which topped the $100,000 mark for the first time on record to extend its post-election rally to around 40%, following President-elect Donald Trump selection of Paul Atkins as Chairman of the Securities & Exchange Commission.Â
The world’s biggest crypto currency was last marked 3.85% higher on the day at $102,562.80 per bitcoin.
Heading into the start of the trading day on Wall Street, however, investors looked set to hit pause on the early December rally head of today’s weekly jobless claims data and Friday’s November employment report.Â
Futures contracts tied to the S&P 500 suggest a modest 3 point opening bell decline while those linked to the Dow Jones Industrial Average, which closed north of the 45,000 point mark last night for the first time ever, suggest a 15 point dip at the start of trading.
The tech-focused Nasdaq, meanwhile, is called 25 points lower, with Nvidia (NVDA) , Tesla (TSLA)  and MicroStrategy (MSTR)  the most-active names in premarket trading.Â
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In Europe, France’s CAC-40 benchmark rose 0.35% in mid-day Paris trading, while French government bond prices jumped, following the resignation of Prime Minister Michel Barnier following a no-confidence vote that toppled his center-right coalition government.
Europe’s Stoxx 600 benchmark rose 0.34% in Frankfurt while Britain’s FTSE 100 edged 0.05% lower in London.
Overnight in Asia, markets were largely muted with the Nikkei 225 rising 0.3% in Tokyo and the regional MSCI ex-Japan benchmark slipping 0.05% into the close of trading.
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