By Geoffrey Smith
Investing.com — U.S. stock markets opened mixed in narrow ranges on Wednesday, as the consolidation that set in after Monday’s surge to record highs continued.
Abundant liquidity and an improving economic outlook – underlined by the International Monetary Fund’s upward revision of its U.S. growth forecast on Tuesday – are keeping sentiment positive, with only concerns about valuations acting as a restraint. Measured on a price-sales ratio, the S&P 500 is currently over 10% more expensive than it had ever been before the pandemic.
The highlight of the day doesn’t come until the second half of the session, with the Federal Reserve releasing the minutes of its last policy meeting at 2 PM ET.
Ahead of that, Robert Kaplan – one of very few top officials at the Fed to see a rate hike as necessary already by the end of next year – told The Wall Street Journal that he’s even more optimistic than the IMF about growth, seeing GDP expansion of 6.5% this year and the jobless rate falling to 4%.
Even so, Kaplan warned that the economy is “not yet out of the woods” and added it’s too soon to talk of withdrawing monetary stimulus.
Cruise line stocks were in favor, with Norwegian stock rising 5.4% and Carnival (NYSE:CUK) stock rising 6.3% after the latter said that its cash burn in the first quarter was much less than expected. It added that bookings for 2022 are already ahead of its last pre-pandemic year. As with Norwegian, Carnival intends to resume sailings from ports outside the U.S. this summer.
Wall Street Opens Mixed as Consolidation Continues; Dow up 55 Pts
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