Stocks continue gains as sell-off looks overdone

Equities are in the black as we head into the afternoon session, with traders now believing that the US Federal Reserve will decide not to taper its stimulus package for a long time to come.

Traders have recently been viewing good news for the US economy as bad news for stock markets and the recent sell-off was driven by fears that the Fed will cut back on the size of its quantitative easing programme.

However, president of the Minneapolis Federal Reserve, Narayana Kocherlakota, said on Monday that it’s wrong to think that the Fed is keen to cut back on the size of its stimulus package, and investors are using this comment as an excuse to acquire relatively cheap stock.

US index futures were boosted by a 3.6% month-on-month increase in durable goods orders in May, with economists expecting an increase of 3% on the month. We are currently calling the Dow to open 70 points higher at 14,729.

New homes sales and Richmond manufacturing figures follow at 3pm (London time), and if the reports again beat expectations the rally could be set to continue.

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CFD’s zijn complexe instrumenten en brengen vanwege het hefboomeffect een hoog risico mee van snel oplopende verliezen.