Wall Street dips after Fed minutes affirm low interest rates for longer
Wall Street dropped towards the end of trading, as traders digested the latest update from the Federal Reserve latest’s meeting.
The Dow Jones, and Nasdaq indexes are currently down by 0.06 and 0.07 per cent respectively, while the S&P 500 is performing a little better, up 0.6 per cent.
The Fed struck a dovish tone in the minutes of its March policy meeting today, reinforcing expectations that interest rates will remain low for some time.
The central bank also committed to extending monetary policy support until an economic rebound in the United States was more secure.
The Fed also said “it would likely be some time” before conditions improved enough for it to consider pulling support.
Elsewhere, the FTSE 100 was on the edge of clawing back all of its pandemic losses after climbing again today on the back of a lower pound and continued confidence that the end of lockdown is in sight.
This afternoon London’s premier index closed up 0.91 per cent at 6,885.32 points.
Younger sibling the FTSE 250 of midcaps picked up another 0.7 per cent this morning, taking it above 22,000 for the first time in history. It closed at 22,156.75 points.
That the indices have all but recovered their pandemic-related losses shows just how much investor sentiment has turned around over the last year.
Today’s services PMIs suggest that their confidence has been well-placed. The index clocked in at 56.3, the first time it has recorded a score of above 50 – indicating growth – since October.
After a healthy tumble yesterday, sterling slid again this morning, falling 0.2 per cent to teeter on the edge of $1.38.
The fall has helped push the FTSE up faster than the CAC and DAX, which are flat for the day.
Deliveroo up as retail traders hold the line
After last week’s disastrous IPO, which saw shares drop 30 per cent upon admission to the London Stock Exchange, today marked the first day of unrestricted trading for Deliveroo.
Despite fears that a second sell-off could be in the offing, traders have thus far held the line, said Neil Wilson, chief market analyst at Markets.com.
“I’m not sure if this is a vote of confidence or a case of averaging in, but it’s no doubt a big relief to management and the bankers involved that the retail army has not routed at the first sound of gunfire”, he said.
“Given the wipe-out that has already taken place, I think a lot of investors will simply think that it cannot go any lower and it’s worth holding on for a better price. Cutting losers is harder than letting winners run.”
The stock is currently up 2.4 per cent at 286.74 points.
On the FTSE 250, fellow food delivery outfit Just Eat Takeway is currently leading the risers, up 4.3 per cent for the day.
A raft of other heavyweights also performed well on the FTSE, with DS Smith up 3.2 per cent, housebuilders Taylor Wimpey and Persimmon up 2.6 per cent and 2.4 per cent, and Aveva up 2.4 per cent.
On Wall Street
After a slow day of trading yesterday, Wall Street’s main markets were flat at the open this afternoon.
The Dow Jones and the S&P 500 pushed up 0.1 per cent apiece, while the tech-heavy Nasdaq slipped 0.3 per cent.
The latest Fed minutes, which are due out later today, will give investors an update on what the central bank is thinking with regards to interest rates and the economic recovery.