US stocks on Friday opened slightly lower, taking a pause after three straight days of gains as investors cheered the Federal Reserve’s decision to leave interest rates unchanged earlier this week.
Advertisement
The three major indexes are poised to end the week higher after the S&P 500 index notched its best two-day performance in more than two months on Thursday.
Wall Street looked set to open slightly lower on Friday as oil prices came off a two-week high, a day after the Nasdaq closed at a record high for the second straight day.
“Because the Fed is shying away from tightening, there will be liquidity sloshing around in the world’s financial markets as well for another few months”, said Tatsushi Maeno, senior strategist at Okasan Asset Management. After hesitating or worrying that the Federal Reserve will raise interest rates, investors piled into high-dividend stocks following yet another Fed decision to stand pat on interest rates. The 10-year yield has stayed fairly consistent since early September, significantly above its August range of 1.725 percent to 1.75 percent.
It hit a session high after Boston Fed President Eric Rosengren said he believed US short-term interest rates should be raised now and warned a decline in the jobless rate below sustainable levels could derail economic recovery.
Asia’s investment grade dollar bonds, an investor favorite, are also returning near double-digit returns, with 5-year yields down almost 100 basis points from around 3.4% at the end of 2015.
However, the US central bank signaled that it could tighten monetary policy before the end of the year if the job market continued to improve.
The dollar index, which measures the greenback against a basket of currencies, was up 0.1 percent at 95.534.
Rosengren forecasts the nation’s unemployment rate, currently 4.9 percent, will dip to below 4.5 percent by 2019, requiring action from the nation’s central bank now, he said in a statement issued Friday.
Boston Fed President Eric Rosengren said in a statement on Friday that the U.S. short-term interest rates should be raised now, Xinhua news agency reported.
The market has been making lower highs over the longer term, so I believe that we are eventually going to build up enough momentum to finally break down below the 1.1150 level.
The dollar bought 101.10 Japanese yen, higher than 100.90 yen in the previous session.
On the commodity markets, the November crude oil contract fell 28 cents to US$46.04 per barrel, while the November contract for natural gas shed 3.2 cents to US$3.029 per mmBtu.
Advertisement
Elsewhere, copper CMCU3 rallied to a six-week high despite worries about slow demand growth, supported by the Fed’s policy.
