The risk party carries on ahead of European trading
No stopping the exuberance in the stock market so far this week
After returning from the long weekend, Wall Street has taken charge and is leading the risk party over the past few days with major indices closing at record highs as Biden gets sworn in as the 46th US president yesterday.
Asian equities are feeding off the optimism with US futures also pointing to gains once again in the early stages today. S&P 500 futures are up 0.3% while Nasdaq futures are up 0.6% as the positive vibes begin to reverberate to Europe.
This comes amid the backdrop of a bit of a breather in the reflation narrative with the bond market keeping little changed and 10-year Treasury yields sitting at 1.078%.
While equities may still be a beneficiary from all the talk about spending and stimulus to follow, the fact that tech is leading the charge exemplifies that the market is going 'back to basics' here and that is to focus back on the Fed put.
After Powell came out to clarify the Fed's position, it kept the Fed put very much alive and while that has been overshadowed by Biden's stimulus pledge at the end of last week, I'd still say the Fed remains the key driver of the market in the bigger picture.