(Bloomberg) — U.S. stocks are set to hit another record high on Tuesday as investors await congressional testimony from Federal Reserve Chairman Jerome Powell for clues about the outlook for U.S. interest rates.
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With second-quarter earnings season fast approaching, futures for the S&P 500 index rose after the index hit its 35th record high this year. Futures for the interest-rate-sensitive Nasdaq 100 index also rose ahead of Powell’s speech.
Investors will be closely watching the Fed chairman for any indication as to when policymakers might cut interest rates. A long-awaited shift to easier policy would give investors who have pumped a record $6 trillion into the money market an incentive to buy bonds and other assets.
“It’s a token gesture until we see the Fed really cut rates,” said Anders Persson, chief investment officer at Nuveen Inc. “There’s some skepticism about getting out of the 5%-yielding cash and money market investments that many retail investors hold and enjoy.”
Markets are pricing in two rate cuts this year, with the first coming in September at about a 70% chance, according to swaps data compiled by Bloomberg.
Powell is also likely to face tough questions about U.S. plans to force Wall Street firms to significantly build up capital, after Reuters reported that regulators are considering changes to how they are calculated that could save the nation’s eight largest banks billions of dollars combined.
European stocks fell on concerns about French government spending following a weekend general election that saw a return to power for the left.
Among individual stocks, BP slumped more than 3% after it said it expected to take a loss of up to $2 billion due to impairments in its second-quarter results, while Dassault Systèmes slid after cutting its full-year profit forecast.
U.S. corporate earnings season kicks off on Friday with JPMorgan Chase releasing its financial results.
Major events this week:
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China’s total loans, money supply and new yuan loans from Tuesday
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Jerome Powell gave his semi-annual testimony before the Senate Banking Committee on Tuesday.
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U.S. Treasury Secretary Janet Yellen testified before the House Financial Services Committee on Tuesday.
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Federal Reserve Chair Michael Barr and Michelle Bowman speak on Tuesday
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China producer price index, consumer price index, Wednesday
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Rep. Jerome Powell will testify before the House Financial Services Committee on Wednesday.
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Federal Reserve Board members Austan Goolsbee, Michelle Bowman and Lisa Cook speak Wednesday
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U.S. Consumer Price Index, Initial Jobless Claims, Thursday
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Federal Reserve Presidents Raphael Bostic and Alberto Mussallem to speak Thursday
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China trade, Friday
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University of Michigan Consumer Sentiment Index, U.S. Producer Price Index, Friday
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Citigroup, JPMorgan and Wells Fargo to report earnings on Friday
Some of the key market developments:
stock
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S&P 500 futures were up 0.2% as of 7:13 a.m. New York time.
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Nasdaq 100 futures rose 0.4%
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Dow Jones Industrial Average futures were little changed
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The Stoxx Europe 600 index fell 0.4%
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The MSCI World Index was little changed
currency
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The Bloomberg Dollar Spot Index was little changed.
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The euro was little changed at $1.0821
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The British pound was little changed at 1.2808 dollars
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The Japanese yen weakened 0.2% to 161.13 yen per dollar.
Cryptocurrency
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Bitcoin rose 1.9% to $57,349.88.
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Ether rose 2.5% to $3,074.21.
Bonds
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The yield on the 10-year Treasury note rose 2 basis points to 4.29%.
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German 10-year government bond yields rose 3 basis points to 2.57%.
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UK 10-year government bond yields rose 4 basis points to 4.16%.
merchandise
This story was produced with assistance from Bloomberg Automation.
–Matthew Burgess and Aya Wagatsuma with assistance from Matthew Burgess and Aya Wagatsuma.
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