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S&P 500 set for lift off as European markets rally

Published: 21:52 15 Jun 2016 AEST

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The bears have been having a field day of late but bargain hunters look set to re-enter the market today.

European markets managed to stop the rot this morning and the S&P 500 is on course to do the same after sliding almost four points to 2,075. Spread betting quotes indicate the benchmark index will open at around 2079.4.

The more narrowly-based Dow Jones average is set to rise open around 35 points higher at 17,709.

The Federal Reserve is set to announce its decision on interest rates this afternoon, but all of the fun appears to have been taken out of the guessing game by alarming economic indicators that have made it almost certain the Fed will not hike rates this month.

"Gold and silver remain well supported ahead of tonight’s Fed decision and subsequent press conference by Janet Yellen. The chance of a rate hike is pretty much zero, so if there was one it would create pandemonium in the markets. However, as I say, the chances are remote so all eyes will be on the conference afterwards,” according to David Govett, head of Precious Metals at Marex Spectron.

“I suspect we will hear more of the same rhetoric from the last conferences, with Yellen stressing that the pace of rate rises will be data dependent. July is looking unlikely at the moment, but I am sure it will not be ruled out and it will be interesting to see how many of the Fed policy makers will be expecting two rate hikes this year. In March for example, nine out of seventeen were looking for this,” Govett noted.

It has taken a while for the first big trade deal to be announced since the thawing of relationships between the US and Iran, but aircraft maker Boeing Co (NYSE:BA), down 0.8% in pre-market trading, has reportedly sealed a deal with the Middle Eastern country as it seeks to update its ageing fleet.

 

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