S&P 500 Futures: Three-day uptrend around 4,450 portrays risk-on mood

  • S&P 500 Futures extend recovery from two-month low, mildly bid near intraday high of late.
  • Hawkish Fed, easing fears from Evergrande and stimulus hopes underpin upbeat sentiment.
  • Light calendar, passage of the key events hint at easy Friday.

S&P 500 Futures stay firmer for the third consecutive day, adding 0.13% daily during early Friday.

In doing so, the risk barometer looks for fresh impulse amid a sluggish Asian session. However, the aftershocks of the US Federal Reserve’s (Fed) hawkish announcement on Wednesday and upbeat news concerning China’s Evergrande keeps the positive mood intact.

The Fed left benchmark rates unchanged near 0.25% at the latest meeting and signaled rate hikes, as well as tapering, more seriously. The Bank of England (BOE) also followed the Fed, actually more rigorously by signaling that the rate hike precedes tapering. On the same line wad Norwegian central bank that hiked the benchmark rate.

Fading fears that China’s struggled real-estate firm Evergrande is a threat to the economy plays a key role. The firm got restructuring plans and showed readiness to pay a scheduled coupon while also gained government support to lift the sentiment.

Also contributing to the firmer risk appetite are progressing talks over the US $3.5 trillion stimulus and vaccine optimism.

Looking forward, a light calendar and a lack of major events may offer a calmer trading day as the key events have already passed. Even so, US New Home Sales for August, expected 0.7M versus 0.708M prior will join headlines from China and relating to the stimulus to provide fresh guidance.

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