U.S. stock futures pointed to a fourth straight day of losses on Thursday, while gold prices steadied. Experts say investors are now worried that accelerating inflation will force the Fed to pull back stimulus sooner than anticipated. However, Fed officials have largely waved off these fears, saying they expect price hikes to be fleeting. Strategist Kit Juckes said investors should be paying attention to the Fed’s actions, not its words.
CNN Business/Charles Riley
Beware the Fed’s asset price ‘monsters’
Change is hard. Sometimes, talking about change is hard.
But for anxious investors, even talking about talking about changes to the Federal Reserve’s stimulus program proved difficult on Wednesday.
What happened: The minutes from the central bank’s April policy meeting revealed that several officials think the robust US economic recovery means the Fed should review its stimulus program at some point.
“A number of participants suggested that if the economy continued to make rapid progress toward the committee’s goals, it might be appropriate at some point in upcoming meetings to begin discussing a plan for adjusting the pace of asset purchases,” the minutes said.
Keeping reading, here.
Reuters via CNBC/Sethuraman N R
Gold steadies as inflation fears, dollar dip counter ‘taper’ talk
Gold prices steadied on Thursday, as the dollar drifted lower and on fears of rising inflation, offsetting pressure for bullion from ‘tapering’ talks from the U.S. Federal Reserve.
Spot gold was little changed at $1,869.14 per ounce by 1219 GMT. U.S. gold futures fell 0.6% to $1,869.30.
Fed minutes published on Wednesday showed “a number” of officials thought that if the recovery holds up, it might be appropriate to “begin discussing a plan for adjusting the pace of asset purchases.”
Chatter about tapering has impacted the sentiment in gold markets, said ABN Amro analyst Georgette Boele.
“Now we are at crucial resistance levels from a technical point of view … We still expect a higher dollar and modestly higher real yields, which should push gold lower again.”
Gold prices hit their highest since Jan. 8 on Wednesday, but pared most of the gains as the dollar index bounced off from a near three-month low and benchmark U.S. Treasury yields jumped after the Fed minutes were released.
But the dollar has since pared some of these gains, supporting gold by making it less expensive for those holding other currencies.
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Yahoo! Finance/Jonathan Garber
Stock futures point to fourth straight day of losses
U.S. stock futures pointed to a fourth straight day of losses as traders awaited the latest weekly jobless claims report.
Dow Jones Industrial Average futures were lower by 121 points, or 0.36%, while S&P 500 futures and Nasdaq 100 futures were lower by 0.19% and 0.03%, respectively. The selling comes after minutes from the Federal Reserve’s April meeting suggested many members believed the central bank should begin discussing the removal of its emergency support if the economic recovery continues to progress.
Investors will get their latest indication on the health of the economy when weekly jobless claims are released at 8:30 a.m. ET. Economists surveyed by Refinitiv are anticipating 450,000 Americans filed for first-time benefits in the week ended May 15.
In stocks, Dow component Cisco Systems Inc. warned supply-chain disruptions are likely to continue through the end of this year and gave current-quarter profit guidance that was below Wall Street expectations.
Kohl’s Corp. swung to a quarterly profit from a loss the year earlier and raised its profit forecast for the current fiscal year due to strong demand for apparel amid the economy’s reopening.
Elsewhere, crypto-linked names including Coinbase Global Inc., Tesla Inc. and MicroStrategy Inc. saw some relief a day after suffering losses as bitcoin and other cryptocurrencies saw their prices plunge. Bitcoin, which fell to a low of $30,681 on Wednesday, was trading near $40,000 a coin.
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