Fed announces additional stimulus
Wall Street looks set to open in the green on Tuesday after the U.S. Federal Reserve revealed yesterday that it would begin buying debt issued by individual corporations, as part of its previously announced program to allow big employers to get access to cash and keep lending markets running smoothly during the COVID-19 pandemic.
Under the program the central bank can purchase any bonds issued highly rated, investment-grade companies, or those that fit that description before the pandemic emerged. Fed policymakers also urged Congress to spend more as the country emerges from the pandemic.
As of 5:40 a.m. ET, futures tied to the blue-chip Dow indicated a gain of 415 points, or 1.62% to 26,090.5. S&P 500 futures rose 34.12 points, or 1.11% to 3,096.12 while the tech-heavy Nasdaq 100 futures were up 111.75 points, or 1.14% to 9,900.25.
Crude future also rallied with U.S. West Texas Intermediate rising 50 cents, or 1.35% to $37.62 a barrel. International Brent crude futures were at $40.37, up 65 cents, or 1.64% a barrel.
Powell testimony eyed
Today, Fed boss Jerome Powell is due to appear remotely before the Senate Banking Committee starting at 10:00 a.m. ET to discuss the central bank’s semi-annual monetary policy report.
His testimony is not expected to produce any surprises. However, market participants “may be eager to find out whether the Fed remains willing to do more in order to support economic activity hit by the pandemic” following yesterday’s announcement over corporate bonds, according to a note sent by senior market analyst at JFD Bank Charalambos Pissouros to clients.
Powell will also testify before the House financial services committee at 12 p.m. ET Wednesday.
Trump administration said to be preparing a $1 trillion infrastructure spending package
Meanwhile, the Trump administration is preparing a $1 trillion infrastructure spending package to stimulate economic growth, according to a Bloomberg report.
People familiar with the matter told the news outlet that package intends to focus on traditional infrastructure such as roads and bridges along with 5G networks and rural broadband.
The president is expected to discuss rural broadband at a White House event later this week.
