| Last Thursday’s Federal Open Market Committee (FOMC) rate decision seemed to be good on U.S. equity markets and asset markets in General. The NASDAQ Composite Index added 0.7% to its value following the announcement and the Dow Jones added 0.6%. This is somewhat surprising given the announcement of an expected, yet non-trivial, 10 billion dollars reduction of the Fed’s asset purchase program. Further digging into press release accompanying the decision, one would note that the Fed is quite content with growth in economic activity, saying it had rebounded in recent months, and that business fixed investment, which is considered pro-cyclical, has resumed its advance. So one has to wonder, if the economic data is suggesting a more hawkish monetary policy, why are equity markets gaining? QE3's tapering had been quite consistent since it started in December of 2013. In that sense, last week's 10 billion addition was not a surprise. That leaves us with the future path of the Federal funds rate. Regarding this, there is the fact that the announcement saw the Fed’s longer term rate projection sliced from 4% to 3.75%. Regarding rate expectations, last week's announcement had very dull content. Investors could have been concerned of Yellen following BoE Governor Carney’s path, by suggesting that a rate hike could occur sooner than markets currently price. Additionally, Yellen's comment from March, that the gap between the end of QE3 and the Fed raising rates should amount to about six months, was still her most recent guidance. Regarding financial stability, the recent month's rally in equity markets, amid historically high valuations, is another reason to question the current monetary policy. Join Anyoption and take advantage of the volatility of the markets ..Start Trading TODAY! |
Showing posts with label NASDAQ. Show all posts
Showing posts with label NASDAQ. Show all posts
Monday, 23 June 2014
Stocks gain on Fed’s lack of clarity
Tuesday, 3 June 2014
The winter’s final backlash
| Forecasts for the second estimate of the U.S. Q1 Gross Domestic Product, released last Thursday, were not excessively optimistic. The preliminary estimate for the figure, released on April 30th, saw the U.S. economy expand by an annualized 0.1% during the quarter. However, as the effect of bad weather settled in analysts’ economic models, it dragged their estimation for the second print to a contraction of 0.5%. When the second estimate’s data was actually published, it presented an annualized 1% decrease of GDP. The recent datum marked the first quarter in three years in which the U.S. economy presents a contraction. Surprisingly, the effect the bad news had on the markets was somewhat limited. Expectations of the Fed prolonging its aggressive monetary activity were not evident in the U.S. bond yields, as the 10 year presented little change immediately after the publishing. U.S. equity Markets also exhibited with a rather muted reaction with the NASDAQ clearing the day at a 0.5% gain, and the Dow Jones adding 0.4%. Join Anyoption and take advantage of the volatility of the markets ..Start Trading TODAY! |
Wednesday, 15 January 2014
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Tuesday, 7 January 2014
2014 starts with markets uncertainty
The year 2013 came to an end, and most trading sessions ranged from generally muted to somewhat edgy, but were unable to pick any specific direction. Some unexpected trading was provided by the gold and silver markets as the precious metals saw their price drop during the day to as low as $1,182 and $18.83 respectively. However, the dip quickly reverted shortly after, as a correction an hour later saw gold trading over pre-dip levels to as high as $1,209, while silver surged to nearly $19.8. A similar case was evident at the previous week’s Initial Jobless Claims data, released on Thursday. In addition to beating expectations for 344K new claims, with a print of 339K, the figure marked a hefty decrease from the previous week’s revised figure of 341K. It is mostly positive to see a declining trend of claims, but it is hard to miss the fact that the figure never really recovered from the Government Shutdown, as it Is now approximately at the same levels as five months ago. With the tapering already underway, positive claims data continued to raise concerns for reduced Fed purchases, continuing the last months’ ritual of positive labor data boiling down to pessimism on the equity markets. The S&P 500 lost -0.75% during the day, and the NASDAQ dropped approximately -0.4%. Thursday’s bear market did not last long, as optimism regained on Friday, for no apparent reason - leading the trading session seeing markets regain some of the previous day’s losses. Register at ANYOPTION and start trading TODAY! |
Monday, 2 December 2013
Black Friday optimism
Friday presented opportunity for market optimism on both sides of the Atlantic. The Eurozone saw positive data published regarding the demand side, with prices increasing by an estimated 0.9%. Unemployment also provided its fare share as it decreased to 12.1%. That supported the German DAX index and the Spanish IBEX35, closing the week at +1.6% and +1.1% weekly increases respectively. At first, U.S. markets didn’t appear to need any data derived support; Although no positive figure was released in the U.S. on Friday, markets opened with a positive trend, due to optimism based on what appeared to be strong "Black Friday" consumer demand. The S&P 500 gained +0.2% throughout the trading day and the NASDAQ and DJIA complimented with similar figures. This reverted, however, as reports from leading U.S. retailers suggested local demand wasn't as strong as it seemed, leading both the Dow, as well as the S&P to conclude the day in negative territory. Register at ANYOPTION and start trading TODAY! |
Positive data-backed momentum
Last week, equity trading provided another opportunity to admire the optimism recently present in the markets.
Tuesday, provided an opportunity for the NASDAQ to really shine as it passed the 4K mark again, and closed the trading day there, for the first time in 13 years. The positive trading day was backed by U.S. Building Permit statistics, which indicated that 1,034K annualized new permits were granted in October. On the one hand, this is the highest figure since January 2008. On the other hand, it could be a latent response to the recent Federal Government Shutdown, so it will be interesting to re-examine those figures in November.
The day also saw the Conference Board's Consumer Confidence Index losing two points to a level of 70.4. The same positive momentum continued on Wednesday as Initial Jobless Claims dropped by 10K versus the previous week.
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