Market Recap 09/02/15:
U.S. stocks jumped on Wednesday, continuing a recent bout of volatility that has given the market both extreme rallies and extreme selloffs. The general trend has been down – the S&P 500 recently suffered its first correction since 2011, though it has since rebounded from those levels – with markets pressured by slowing growth in China, although the scale of the swings in both directions indicate that investors remain conflicted about market valuation and direction. In addition, investors are waiting to see whether the Federal Reserve will raise interest rates in September, a move that had been viewed as less likely given the global market turmoil. Paradoxically, signs of weakness in China could be taken as a positive by investors, as it suggests the Fed will continue remaining accommodative until markets stabilize. Hopes that the Fed would hold off until 2016 on raising rates contributed to the rally on Wednesday.
Futures were slightly higher on Thursday as a market holiday in China removed the biggest driver of day-to-day volatility, giving investors some breathing room and a chance to reassess U.S. fundamentals. Market direction may become more pronounced after the open, when the release of a key read on the services sector will be released. Investors will examine that report – one of the last major pieces of data before the monthly jobs report on Friday- both for signs of how China is impacting U.S. economic activity, and for whether it suggests the Federal Reserve might move on interest rates sooner or later. Weekly jobless claims, which will be released before the market open, will also be studied. Make sure you don’t miss this week’s Money Matters with Gary Goldberg, where the guest will be Diana Henriques, author of the book “Wizard of Lies.” The show airs Sundays at WOR710. Visit our website www.ggfs.com for more details.