(CercleFinance.com) – Wall Street should open in the green on Friday, heading towards a third consecutive week of increases as investors continue to bet on future rate cuts.
Half an hour before the opening, the ‘futures’ contract on the Dow Jones advanced by 0.2%, suggesting an eighth session of progress in a row for the index.
With a gain of 0.3% in pre-market transactions, the Nasdaq seems well on its way to getting even closer to its historic record established beyond 16,440 points last month.
Over this week as a whole, although completely devoid of catalysts, the Dow has so far managed to gain 1.8% and the Nasdaq around 1.2%.
For several weeks, investors have once again wanted to believe that the more uncertain pace displayed by the American recovery will push the Federal Reserve to ease its monetary policy.
‘The longer interest rates remain frozen at high levels, the more likely they are to penalize the economy and cause a certain financial instability,’ underlines Xavier Baraton, economist at HSBC AM.
“This could create problems in the future, even challenging investors’ widely held assumption of a ‘soft’ landing for the economy,” he adds.
The Dow Jones and the Nasdaq are thus heading towards a third positive week in a row, which allows them to erase a large part of the losses suffered in April and to return to their historic highs.
Investors also welcomed the calm returning to the bond market after two weeks of tension.
The yield on 10-year Treasuries thus stabilizes below the 4.50% mark after reaching, two weeks ago, its highest since last November, at 4.67%.
The trend was also supported by the rise in oil prices, which revived investors’ appetite for oil stocks.
The price of a barrel of Texan crude (WTI) rises another 0.6% to nearly 80 dollars while Goldman Sachs analysts say they are counting on a further reduction in production in OPEC+ countries in June due to Inventory levels considered still high.
The weekend should remain relatively calm in New York, the only indicator of the day being the first estimate of the confidence index from the University of Michigan.
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