S&P 500 Futures flirt with 3,500 as risk tone stays positive

• S&P 500 Futures print mild gains after clocking six-day winning streak to record top of 3,498.12.
• Fed Chair Powell’s AIT moves got well appreciated, hopes of US stimulus add to market optimism.
• Virus woes, US-China tussle and a light calendar can offer intermediate pullback before updates from Jackson Hole Symposium day 02.

S&P 500 Futures remain positive, though with mild gains, for the seventh day in a row making rounds to 3,490 during Friday’s Asian session. The US equity derivative, mostly considered as a risk-barometer, refreshed the all-time high the previous day before stepping back from inch lower than 3,500 mark.

Federal Reserve (Fed) Chair Jerome Powell confirmed the US central bank’s bearish bias the previous day. Even so, the market took Average Inflation Targeting (AIT) as positive, maybe due to prolonged easy money. It should also be noted that the Fed boss signaled that the employment and inflation data are likely to remain lower for a bit longer period.

Other than Powell’s power-play, clues concerning the coronavirus (COVID-19) stimulus package from the US also favor the market sentiment. Having earlier marked a major difference with the ruling Republicans, House Speaker Nancy Pelosi showed readiness to further ease the Democratic demand.

Elsewhere, China banned beef from another Aussie supplier whereas the US keeps threatening TikTok while also showing red eyes to the dragon’s use of missile in the military drills near the South China Sea.

Against this backdrop, the US 10-year Treasury yields rise to the fresh high in 2.5 years while stocks in Asia-Pacific trade mixed by the press time.

Looking forward, a lack of major data can keep the Asian session mostly inactive. However, the COVID-19 updates may entertain the traders ahead of the second day of speeches from the Jackson Hole Symposium. Also important will be the US data on spending, consumer sentiment and Chicago Purchasing Managers’ Index.