Warning: file_exists(): File name is longer than the maximum allowed path length on this platform (260): C:\zpanel\hostdata\zadmin\public_html\forexbr_com_br/wp-content/cache/supercache/www.forexbr.com.br/2020/05/17/market-snapshot-dow-futures-climb-375-points-as-feds-powell-says-dont-bet-against-american-economy-even-as-unemployment-could-rise-to-25/meta-wp-cache-80a00734b02b8f664e65f58af00387c2.php in C:\zpanel\hostdata\zadmin\public_html\forexbr_com_br\wp-content\plugins\wp-super-cache\wp-cache-phase2.php on line 71 Market Snapshot: Dow futures climb 375 points as Fed’s Powell says don’t ‘bet against American economy’— even as unemployment could rise to 25% – Forex Brasil

Market Snapshot: Dow futures climb 375 points as Fed’s Powell says don’t ‘bet against American economy’— even as unemployment could rise to 25%

On Friday, the Dow DJIA, +0.25% rose 61 points, or less than 0.3%, to 23,685.42, while the S&P 500 SPX, +0.39% added 11.20 points, or 0.4%, higher to end the session at 2,863.70. The Nasdaq Composite Index COMP, +0.79% closed at 9,014.56 after gaining 70.84 points, or 0.8%.

Stocks closed out last week lower, with the Dow down 2.7%, the S&P 500 losing 2.3% and the Nasdaq 1.2% lower. Marking their worst weekly skid since the period ended March 20.

What’s driving the market?

Markets looked set to kick off the week on a high note after the worst weekly decline in almost two months, as the U.S. central bank chief said the Federal Reserve would continue to support the economy and financial markets through the viral outbreak.

In an interview with CBS’ “60 Minutes” program, which aired Sunday, Powell said that the road to recovery for the U.S. may take a while and consumers may lack conviction until efforts to find a vaccine for the illness derived from the novel strain of coronavirus are successful.

That said, the monetary-policy maker struck a cautiously sanguine tone about the likelihood for a relatively near-term rebound for an economy that has shown signs of the extreme toll taken on it by measures in place to limit the spread of the pathogen.

“In the long run and even in the medium run, you wouldn’t want to bet against the American economy,” Powell said during the television interview. He did caution that a second wave of infections could rattle confidence further.

Powell also acknowledged that the unemployment rate could hit as high as 25%, marking levels not seen since the Great Depression. But the Fed boss said that he didn’t fear a second depression for the U.S., forecasting that an economic rebound would start to take shape in the second half of the year.

Meanwhile, data in Asian hours on Monday showed Japan’s economy, shrank by an annualized 3.4% in the three months ended March 31 after a 7.3% contraction in the previous quarter, meeting the commonly accepted definition for a recession.

Still, plans to restart stalled economies inside and outside the U.S. have continued to act as a support for markets which have mostly been trading in a trading range since rising from March 23 bear-market low.

“The good news is economies across the globe are starting to reopen, suggesting that some activity will begin to recover compared with the full lockdown experienced in April,” wrote Hussein Sayed, chief market strategist at FXTM in a Monday research report. “However, will there be a price to be paid for the easing of restrictions?”

Rising cases in the U.S., however, where there are more than a third of the 4.7 million world-wide infections, has underpinned fitful trade in assets considered risky. Deaths in the U.S. rose above 89,500, more than a quarter of the more than 315,000 world-wide, according to figures from Johns Hopkins.

Which stocks are in focus?
  • Tesla Inc. TSLA, -0.51% was given the green light from local officials to resume operations at its Fremont, Calif., auto plant, according to the San Francisco Chronicle in a Sunday report, ending a battle with Alameda County officials, who had barred the opening of factories and manufacturing facilities to slow the spread of coronavirus.
  • Uber TechnologiesUBER, -0.97% shares will be in focus after food-delivery company GrubHub Inc.GRUB, +0.45% said it rejected a recent buyout offer from the ride-sharing company.

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