S&P 500 Futures: Post-Fed optimism prevails on mixed chatters over Evergande

• S&P 500 Futures keep rebound from monthly low.
• Fed tapering couldn’t disappoint equity bulls amid difference between rate-hike, taper.
• Evergrande gets China support, firm’s Chairman is optimistic but real-estate lobby make losses on it, stock snaps seven-day fall.
• Preliminary readings of September PMI and Evergrande will join BOE to entertain traders amid off in Japan.

S&P 500 Futures poke 4,400 threshold, up 0.35% intraday during early Thursday. The risk barometer tracks the Wall Street benchmarks to the north during the second positive daily performance.

In doing so, the stock futures try to benefit from the mixed headlines concerning China’s troubled real-estate firm Evergande. That said, the company Chairman tries to placate bears with comments like, “The firm will try its best to resume work and production.” However, headlines suggesting further losses for the Evergrande shareholder, with signals of selling further stake by ArticleBody Chinese Estates, a Hong Kong property company keep traders on their toes.

It’s worth noting that the China Communist Party’s (CCP) deal with the struggling real-estate player Evergrande and the People’s Bank of China’s (PBOC) heavy liquidity injection added to the risk-on mood the previous day.

Also positive for the risk appetite was the US Federal Reserve’s (Fed) economic optimism and tapering plan signals. The US Federal Reserve (Fed) matched market expectations of keeping the benchmark rate unchanged at 0.25% but the policymakers were divided over the hike, now expecting a lift from either 2022 or 2023 versus the previous support for 2023. It’s worth noting that the US central bank cut the 2021 growth forecast and remained unclear on when the rate will start rising after the tapering concludes.

On the contrary, Fed Chairman Jerome Powell not only hints at the positive conditions matching for the consolidation of the asset purchase but also signaled the start of taper as soon as the next meeting, even if on good employment data not needing too strong figures.

Following the Fed announcements, the ambiguity over rate hikes after the planned tapering end of 2022 seems to have underpinned the risk-on mood.

Given the off in Japan restricts the market’s immediate moves, coupled with the mixed headlines over Evergrande, risk appetite may dwindle ahead of the US PMIs and the Bank of England (BOE) meeting. Although expectations are brighter for the scheduled data/events, actual readings and risk catalysts are the keys to follow.