U.S. stock futures rose, bouncing after the previous session’s broad losses, as investors awaited Federal Reserve Chairwoman Janet Yellen’s testimony to Congress.
In an otherwise quiet week for economic-data releases, investors will be tuned in to Ms. Yellen’s testimony to Congress, which begins at 10 a.m. EDT. They will focus on the question-and-answer period for any signs that the Fed may be changing its exit strategy from its low interest rate policy following a strong April jobs report.
“Ms. Yellen is a focus for today, but I don’t expect any surprises from her,” said Gail Dudack, chief investment strategist at Dudack Research Group, a division of brokerage firm Wellington Shields & Co. “To a large extent, she’s been a steady hand.”
My opinion: I think the comment by Dudack is accurate. Yellen has displayed a very steady course since being handed over the chair job in early February. After promising job numbers just a week, I would expect Yellen to laud the private sector; while at the same time announcing a cautious and continued pace of the taper.
I believe the Fed has been trying to portray confidence in the market with their continued taper. Knowing the Fed had preliminary job numbers before the announcement, I think that now any deviance from a continued taper would project disappointing market numbers to follow.
At this point, as long as the numbers don’t plummet I would expect the taper to continue as we watch the economy start to ride along without the training wheels of QE.