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US stocks mixed at lunch as markets mull Fed chair's testimony

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12.10pm: US stocks mixed at lunch

US stocks were mixed at lunch as traders mulled over the beginning of Federal Reserve chairman Jerome Powell’s two days of testimony before Congress.

The Dow Jones Industrial Average was up around ten points at 34,889; the S&P 500 was up two points at 4,371 and the tech heavy Nasdaq was down four points at 14,673

Earlier, FTSE 100 closed down around 33 points, or 0.47%, at 7,091 in London.

“Jerome Powell stuck to the script on monetary policy this afternoon, delighting those who think the current spike in prices will be temporary and frustrating those who had hoped the central bank chief would trim his sails into a growing wind of unease about the direction of inflation,” said Chris Beauchamp, chief market analyst at IG.

“Perhaps what also helped has been his reiteration that the Fed would act if needed, soothing fears that some harboured about Fed policymakers being asleep at the wheel.”

10.05am: Proactive North America headlines:

Snowline Gold Corp (CSE:SGD) (OTCPINK:SNWGF) posts encouraging drill finds at Einarson gold project in Yukon

Cloud DX Inc (CVE:CDX) (OTCQB:CDXFF) commences trading on the OTCQB Venture Market

Esport Entertainment Group Inc (NASDAQ:GMBL) (FRA:40Y1) raises revenue guidance after completing Bethard acquisition

Vicinity Motor Corp (NASDAQ:VEV) (CVE:VMC) (FRA:6LG) receives first order worth $1 million for 10 VMC 1200 Class 3 electric trucks

Medallion Resources Ltd (CVE:MDL) (OTCQB:MLLOF) (FRA:MRDN) finishes techno economic assessment for REE extraction from mineral sand monazite

PsyBio Therapeutics Corp (CVE:PYSB) (OTCQB:PSYBF) (FRA:PSYB) sees its shares debut on the OTCQB Venture Market in the US

Great Panther Mining Limited (TSE:GPR) (NYSEAMERICAN:GPL) (FRA:G3U) says 2Q silver production climbed 135% year-over-year

Mandalay Resources Corporation (TSE:MND) (OTCQB:MNDJF) (FRA:R7X2) on track to meet 2021 production guidance as it records solid second quarter

PyroGenesis Canada Inc (TSE:PYR) (NASDAQ:PYR) (FRA:8PY) to launch e-commerce website offering charitable swag and accessories

PharmaDrug Inc (CSE:BUZZ) (OTCPINK:LMLLF) reveals positive results from preclinical cepharanthine study in cancer showing heightened response in cell lines

LexaGene Holdings Inc (OTCQB:LXXGF) (CVE:LXG) (FRA:5XS2) retains intellectual property law firm Wolf Greenfield as it grows its portfolio

DRDGOLD Limited (NYSE:DRD) (JSE:DRD) (FRA:DUBA) says copper elution circuit at its Far West Gold Recoveries expects additional 1.2kg to 1.8kg of gold per month

Bam Bam Resources Corp (CSE:BBR) (OTCPINK:NPEZF) (FRA:4NPB) welcomes latest ‘exciting’ exploration finds at Majuba Hill

Idaho Champion Gold Mines Canada Inc (CSE:ITKO) (OTCMKTS:GLDRF) (FRA:1QB1 receives drilling permit for Federal Mining claims at Champagne project

CleanSpark Inc (NASDAQ:CLSK) strikes agreement with ESG-focused crypto miner Coinmint

Silvercorp Metals Inc (TSE:SVM) (NYSEAMERICAN:SVM) (FRA:S9Y) expects to meet annual output guidance for fiscal 2022 despite first quarter decline

Empower Clinics Inc (CSE:CBDT) (OTCPINK:EPWCF) (FRA:8EC) reports record first-quarter revenue as acquisitions kick in

9.37am: Wall Street shares higher

The main indices on Wall Street started Wednesday’s session on the front foot after Fed chair Jerome Powell’s testimony appeared unphased by the recent rise in inflation, possibly soothing nerves among traders.

Shortly after the opening bell, the Dow Jones Industrial Average was up 0.41% at 35,030 while the S&P 500 climbed 0.52% to 4,391 and the Nasdaq rose 0.77% to 14,790.

“Chair Powell’s Testimony, ahead of his appearance at the House later today, breaks no new ground.  Mr. Powell repeated his view that inflation “will likely remain elevated in coming months before moderating” as “bottlenecks unwind” and unfavourable base effects fade. The Chair did not directly allude to his previously-expressed view that rising labour supply in the fall will prevent the reopening inflation spike from becoming embedded, though he did note that labour participation right now is little changed from a year ago, and is still “low”, said analysts at Pantheon Macroeconomics.

“On the policy front, Mr. Powell said that the “substantial progress” needed to trigger tapering is “still a ways off” but that the debate will continue in coming meetings.  In short, no change from the June FOMC meeting, and no hint that the latest round of inflation data are threatening Mr. Powell’s core view. Still dovish”, they added.

8:10am: Wall Street to start mostly higher

Led by the tech-powered Nasdaq, the main Wall Street indices are pointing towards a positive start on Wednesday morning, according to the futures market, though the Dow Jones Industrial Average is predicted to open fairly flat.

Investment has continued to flow heavily into US stocks, strategists at Citi noted earlier this morning, with US$6.4bn of new positions added to the S&P 500 (SPX) and US$2.1bn to the Nasdaq 100 (NDX) over the week.

“SPX futures positioning is one sided and very extended, but profit levels remain small. For NDX, positioning is the most extended ever seen and the highest since Sep 20.

“Risk is increasingly skewed to the downside with NDX long holders on average sitting on 5% of profit.

“The reverse seems to be taking place in Europe, with increasing new short positioning across EuroStoxx, DAX and FTSE. Net positioning has fallen over the week in Europe, indicating a higher degree of investor caution.”

Meanwhile, bank earnings season continues to roll on with figures due out from Bank of America Corp (NYSE:BAC), Wells Fargo & Co (NYSE:WFC) and Citigroup Inc (NYSE:C).

Four things to watch for on Wednesday:

  • Aside from bank earnings, there will also be numbers from Delta Air Lines Inc (NYSE:DAL), drug delivery specialist Oramed Pharmaceuticals Inc (NASDAQ:ORMP) and digital streaming firm Cinedigm Corp (NASDAQ:CIDM)
  • Shares in investment manager BlackRock Inc (NYSE:BLK) may draw attention after the firm reported profits and revenues that beat expectations
  • Investors will also be keeping an eye on upcoming testimony from Fed chair Jerome Powell to Congress later today
  • On the macro front, US PPI data may be of interest following yesterday’s inflation figures alongside more mortgage application data

Story by ProactiveInvestors


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