US futures rise as investors await earnings and Jerome Powell says the Fed will keep up support

Second-quarter earnings season is in full flow.
Ramin Talaie/Corbis via Getty Images

US futures climbed on Friday as earnings season rolled on, with European stocks also rising.
Investors digested comments from Jerome Powell, who said the Fed was keeping a close eye on inflation.
Bond yields rose after slipping on Thursday, while bitcoin continued to slide.
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US stock futures rose on Friday as investors awaited more earnings figures from major companies and digested comments from Jerome Powell, who said the Federal Reserve will keep up its support for the economy.
Futures for the benchmark S&P 500 rose 0.16%, after the stock index sipped 0.33% on Thursday. Nasdaq 100 futures climbed 0.16% and Dow Jones futures rose 0.18%.
Earnings season is in full flow, with financial giants State Street and Charles Schwab due to report later in the day. Luxury fashion retailer Burberry reported a rebound in sales and hailed an "excellent start to the year" on Friday.
Trading was mixed in Asia overnight, with China’s CSI 300 down 1.1% but Hong Kong’s Hang Seng up 0.37%. In Europe, the continent-wide Stoxx 600 rose 0.07% while London’s FTSE 100 climbed 0.34%.
As well as studying earnings, investors will be parsing Fed Chair Powell’s comments from his second day in front of Congress. He admitted he had been surprised by the strength of inflation, but said the central bank’s $120 billion a month of bond purchases remained appropriate for the time being.
Inflation jumped to a 13-year high of 5.4% year-on-year in June, but Powell said much of it was due to "temporary factors that will abate over time."
Powell said: "To the extent it is temporary, it wouldn’t be appropriate to react to it. But to the extent it gets longer and longer, we’ll have to re-evaluate the risks." The Fed Chair said the previous day that it would be a "mistake to act prematurely."
The market reaction to Powell’s testimony was muted. Many analysts took his words as a sign that the Fed still thinks inflation will be transitory, and is therefore going to keep up the support that has boosted stocks.
Bond yields, which move inversely to prices, edged slightly higher on Friday after falling on Thursday. The yield on the key 10-year US Treasury note climbed 3.2 basis points to 1.329%, continuing to trade at around the lowest levels since February.
Investors remain somewhat stumped by the fall in yields at a time when inflation has surged in economies across the world, eroding the value of bonds’ fixed payments.
"We continue to see the fall back in bond yields as part of a correction against a rising trend in yields that will resume as global recovery continues," Shane Oliver, head of investment strategy at AMP Capital, said.
Elsewhere in markets, oil prices picked up after falling on Wednesday and Thursday due to concerns about rising coronavirus cases around the world. Brent crude rose 0.46% on Friday to $73.81 a barrel, while WTI crude climbed 0.52% to $72.01 a barrel.
Bitcoin fell 1% to $31,440, continuing its downward trend after starting the week at more than $34,000.
Read the original article on Business Insider

Source: https://www.businessinsider.com/stock-market-today-us-futures-jerome-powell-q2-earnings-2021-7

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