Tuesday, August 04, 2020

Stocks rise, dollar falls on 'accommodative' Fed

Dec 12. 2019
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By Syndication Washington Post, Bloomberg · Sarah Ponczek, Vildana Hajric

U.S. stocks rose with Treasuries, while the dollar fell after the Federal Reserve left interest rates unchanged and its chairman signaled it would keep policy "somewhat accommodative."

The S&P 500 halted a two-day slide as the central bank's decision fueled bets that the bar for an increase in rates remains high even as economic growth is steady. The 10-year Treasury rate fell below 1.8%.

The Fed, in its first unanimous vote since May, said it will continue to monitor the implications of data for the economic outlook "including global developments and muted inflation pressures." Fed Chairman Jerome Powell said the central bank will keep rates where they are unless there's a meaningful change in the outlook.

"It's 'steady as she goes' from the Fed today," said Jason Pride, chief investment officer of private wealth at Glenmede Trust. "This accommodative stance should provide a measure of support for risk assets heading into the new year."

Equity gains had been muted throughout the session as investors kept an eye out for trade headlines. The Dow Jones industrial average was little changed amid more trouble for Boeing's Max plane and Home Depot's weak forecast. Crude slipped after U.S. inventory data was released.

With the world's top two economies still wrangling over an interim deal, Thursday may bring news as President Donald Trump is expected to talk to his trade team about china, according to people familiar with the talks.

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Here are some other key events to watch:

- Brazil's central bank also decides on interest rate.

- The next European Central Bank policy meeting is on Thursday.

- The U.K. holds a general election Thursday.

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And these are the main market moves:

Stocks

The S&P 500 index gained 0.3% at 4 p.m. New York time.

The Nasdaq composite index advanced 0.6%.

The Dow Jones Industrial Average was up 0.1%.

The MSCI All-Country World Index climbed 0.4%.

Currencies

The Bloomberg Dollar Spot Index fell 0.4%.

The Japanese yen rose 0.2% to 108.55 per dollar.

The euro added 0.3% to $1.1131.

Bonds

The yield on two-year Treasuries lost three basis points to 1.62%.

The yield on 10-year Treasuries fell five basis points to 1.79%.

Germany's 10-year yield declined two basis points to -0.32%.

Commodities

West Texas Intermediate crude fell 0.7% to $58.84 a barrel.

Gold futures advanced 0.8% to $1,479.50 an ounce.

Brent crude gained lost 1.1% to $63.62 a barrel.

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