Dow Extends Winning Streak Amid Fed Rate Cut Hopes
The $Dow Jones Industrial Average (.DJI.US)$ is heading into Friday with a seven-day winning streak, the longest since a nine-day streak in December. Meanwhile, the $S&P 500 Index (.SPX.US)$ has also seen gains, closing above 5,200 for the first time since early April.
Investor sentiment has improved recently following signals from the Federal Reserve that an interest rate hike is not imminent, suggesting a limit on interest rates that may be positive for stock markets. This optimism is further supported by a robust earnings season and some weaker-than-expected labor market data, which together have enhanced the confidence in the stock market outlook.
US Initial Jobless Claims rose to 231K for the week ended May 3, marking the largest weekly increase in new claims since August of the previous year. Additionally, the figure for the prior week's Initial Jobless Claims was modestly adjusted upwards to 209K from the initially reported 208K. This uptick in unemployment claims is fueling expectations among investors eager for interest rate reductions, heightening anticipation that the Federal Reserve may be compelled to consider lowering rates sooner rather than later.
What's important in all of this context is, 'are we in the early stages of a long-term bull market or not? '" Chris Hyzy, chief investment officer of Merrill and Bank of America Private Bank. "It feels comfortable saying it on a day like this, but we are, in our opinion."
Source: CNBC, FXS, mint
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