- Nasdaq 100 leads Wall Street’s first positive day in three with 1.19% gains.
- BOC tapering recalls market optimism amid a light calendar elsewhere.
- Fewer-than-expected Netflix subscribers couldn’t disappoint markets.
- Intel earnings, ECB will be the key to watch.
Global equity markets cheered the Bank of Canada’s (BOC) 25% tapering of the weekly bond purchases on Wednesday, Wall Street isn’t an exception. The US stocks gained additional support from Nasdaq Inc., Apple and Chipotle announcements, while ignoring Netflix, amid an otherwise quiet economic calendar.
Netflix reported downbeat subscriber addition of near four billion but couldn’t stop Nasdaq 100 from being the winner on Wednesday, up 163.95 points or 1.19%. The reason could be traced from upbeat earnings from Nasdaq Inc. and Chipotle as well as Apple’s slew of new releases.
Elsewhere, Dow Jones Industrial Average (DJI30) and S&P 500 both gained 0.93% on a day, or 316.01 and 38.48 points respectively, during their first run-up in the week.
Being the first among major central bankers to move towards tapering, the BOC propelled market sentiment and weighed down the US dollar index (DXY) on Wednesday. Even so, the Canadian central bank’s move couldn’t be considered as leading the Fed towards tapering in its next week’s monetary policy, neither to the ECB in today’s meet. This could be well observed in no major reaction by the US 10-year Treasury yields, around 1.55% by the press time.
It should be noted that the recent challenges to the market’s risk-on mood take clues from the worsening covid conditions in India, signals for third jab requirements and deadlock over the US infrastructure spending bill that can have stronger implications.
Read: Fresh Aussie-China tussle, US infrastructure spending bill talks and covid woes can weigh on sentiment
Looking forward, today’s European Central Bank (ECB) decision will be the key after the BOC’s upside surprise, despite the market consensus suggesting no change in benchmark rates and asset purchases. Also crucial will be the US Weekly Jobless Claims, Chicago Fed National Activity Index and Existing Home Sales. Further, the earnings calendar has Intel as the key player to watch.