From the Wall Street Journal’s “Stock Futures Edge Lower After Dow’s 550-Point Rally" posted early Tuesday:
Stocks have been volatile in recent days as investors looked for clues about how quickly the Fed will move to pull back its support of the economy, and whether the rebound may be stunted. Money managers’ concerns about a spike in inflation and the prospect of higher rates have eased, but markets remain on edge.
Mr. Powell plans to tell Congress on Tuesday that job growth should pick up in coming months and temporary inflation pressures should ease as the economy continues to recover from the effects of the pandemic. He is likely to take questions on the outlook for inflation and the labor market, which may offer fresh insights into the potential pace of interest-rate hikes and the easing of the Fed’s bond-buying program.
“The market is in a very fragile, emotional state,” said Altaf Kassam, head of investment strategy for State Street Global Advisors in Europe. “It will be a rocky road, it will be bumpy and pronouncements from central bankers are going to get very quick, knee-jerk responses.”
Money managers are reconciling themselves to the idea that stimulus measures will be pared back slowly, but not in the immediate future, he added. “There is still plenty of time for markets to get accustomed to [a rate increase]. It really doesn’t feel like the beginning of the end just yet.”
My take: After the party Monday, Mr. Premarket is a bit hungover.