Wall Street to open higher as stimulus optimism persists

US stocks are expected to open on the front foot as traders continue to expect politicians to come to an accommodation over a US$900bn fiscal stimulus package. Spread betting quotes suggest that the Dow Jones Industrial Average, which lost ground yesterday, will rise 137 points to open at around 30,292. The S&P 500 is expected to advance 20 points to 3,721 and the Nasdaq Composite is tipped to rise 63 points to 12,721. “Stimulus talks in Washington DC have made significant progress and markets are already pricing in a deal by year-end,” ventured Milan Cutkovic, a market analyst at Axi. “The pressure to reach a deal is rising on both parties as the US economy could be sliding into another recession, and investors remain optimistic that another aid package is just around the corner. “No surprises from yesterday’s FOMC meeting, where central bank once again confirmed that rates are likely to stay near zero until late 2023, and stressed the need for further fiscal support. “The US Fed revised its economic outlook slightly higher, but significant risks remain in the short-term. While the vaccine development is great news, it is clear that it will take time for life to return to some form of normality; however, the mood on Wall Street remained upbeat,” he added. Rabobank said that if recent indications from US initial jobless claims and payrolls data were not convincing enough, “yesterday’s release of November retail sales data provided further evidence that the pace of the US economy has been slowing”. “While the US economic outlook will be lifted by policy support, the headwinds are strong. Covid-19 related hospitalisations continue to hit record highs necessitating various restrictions around the country. The Fed’s two-day policy meeting ended last night with Chair Powell stating that the case for further fiscal policy was ‘very, very strong’, noted Rabobank. On the economic front today, the US has housing starts data, where a modest decline is expected for November. Traders will also be keeping an eye out for the Philadelphia Fed’s manufacturing survey for December and the weekly jobless claims. Four things to watch for on Thursday: A few famous names on the earnings calendar today, with second quarter figures expected from parcel delivery giant FedEx Corp (NYSE:FDX) Also in the diary are first quarter earnings from accountancy and consulting services firm Accenture PLC (NYSE:ACN), as well as second quarter numbers from food firm General Mills Inc (NYSE:GIS) The macro diary will bring jobless claims figures for the week to 12 December, which are forecast to show a decrease to 818,000 from the prior week’s number of 853,000. Data is also due on housing starts and new building permits for November, with the former predicted to rise to an annualised pace of 1.535mln from 1.53mln in October, while the latter are expected to increase to 1.57mln from 1.54mln