Stock index futures were slightly flat ahead of the open as investors may try to build on Wednesday’s reaction. The Federal Reserve Board reacted negatively on major indexes after unveiling plans to shrink in November and December. Today the announcement of financial results is back in the spotlight.
Many investors say that Uber (UBER)
) Today’s winning news based on Lyft tone (LYFT
) Yesterday. Lyft rebounded more than 8% with better-than-expected sales. Uber says drivers are returning as COVID-19 fears are reduced. This can bode well for the company in terms of profitability and another good sign that the economy is returning to normal.
After the closing of Square today
(SQ) announced a profit. Although Square is a payments company, it also offers music subscription services in 56 countries under TIDAL. TIDAL recently signed a contract with Tesla
(TSLA) Provides music in Tesla cars.
Investors may miss the slow decline of the VIX (Cboe Volatility Index) to 15 on the news and excitement from the Fed. Many investors see this as a sign of a bullish stock. However, investors need to keep them from falling asleep. The market does not move in a straight line and there are many problems that the market is still solving.
Federal Reserve System Overview
The major indexes were mixed on the Wednesday before the Fed’s announcement. Russell 2000 (RUT) didn’t wait for the Fed, however, so it broke resistance and set a new record to break out of a nine-month stretch. Many investors may see this as a sign that sentiment is turning more bullish. Following the announcement, the S&P 500 (SPX), the Dow Jones Industrial Average ($DJI), and the Nasdaq
(COMP:GIDS) recovered and set a new record.
For the most part, the Fed’s announcement went as expected, planning to cut bond purchases in November and December by cutting $15 billion a month. At this rate, the Fed’s stimulus will stop around June 2022. However, the Fed said it is flexible because it can speed up or slow down purchases as needed.
The announcement did not address rate hikes, and Federal Reserve Board Chair Jerome Powell decided at a press conference after his announcement to focus on rate cuts without addressing the issue of interest rates. Despite the bypass, Federal Fund Futures are currently estimated to have a potential rate hike of around 50% by June 2022 and a rate hike of more than 90% by December 2022.