Sep 03 2015

Wall St gets some breathing room as investors await data

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.

Looking ahead:

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.

Sep 02 2015

Investors await clarity from data after sell-off

Market Recap 09/01/15:

U.S. stocks fell sharply on Tuesday, with major indexes down nearly 3 percent as concerns continue to grow over the pace of economic growth in China, as well as on what impact that would have on the domestic economy. The sell-off was sparked by weak data out of China’s manufacturing sector, which shrank at its fastest pace since 2012 in August. Those losses were compounded after U.S. data showed the manufacturing sector slowed to its weakest rate in over two years in August. While some have argued that the recent turmoil in the markets have priced in any additional weakness from China, International Monetary Fund head Christine Lagarde forecast global growth coming in at a weaker pace than had been expected a few months ago, which some traders took to indicate that the market had yet to bottom.

Looking ahead:

Futures were higher on Wednesday in a rebound from the previous session’s decline, though crude oil continued its downward trend, which could put additional pressure on Energy companies. The group has come under heavy pressure this year, hit by lower demand from China and excess supply, which have led to prices sharply falling. Trading may be influenced by economic data reports coming out later in the day, starting with the ADP report on private-sector employment before the market opens. That report could provide a preview of what to expect with Friday’s jobs report. In the afternoon, the Federal Reserve will release its beige book of economic conditions, which will be examined for any hints about the central bank’s interest rate policies. Make sure you don’t miss this week’s Money Matters with Gary Goldberg, which airs Sundays at WOR710. Visit our website www.ggfs.com for more details.

 

Sep 01 2015

Weakness returns to market on China, rate concerns

Market Recap 08/31/15:
 
U.S. stocks fell on Monday, closing out their worst month since 2012 as questions continued to swirl over whether the Federal Reserve would raise rates in September or hold off for a few more months. On Saturday, Stanley Fischer – the vice chairman of the Fed – said that inflation would likely rise as pressure from the dollar fades, which would allow the central bank to raise rates in a gradual fashion. The comments were taken as a more aggressive stance towards rates, and come amid uncertainty over China’s growth rates, which have sharply pressured markets of late. Many investors had been betting that because of the recent turmoil in markets, the Fed would hold off on raising rates until December or 2016. Volatility is likely to remain elevated until the Fed’s September meeting.
 
Looking ahead:
 
Futures were sharply lower on Tuesday, with China once again pressuring markets on signs of slowing growth. In the latest data from the world’s second-largest economy, factor activity fell to a three-year low in August. Christine Lagarde, the head of the International Monetary Fund, warned that developing countries should prepare for the impact of China slowing, suggesting that the country may not yet have reached a bottom. While commodity prices have rebounded in the past few days, oil took a sharp turn lower, down 4 percent, which could continue to weigh on the already-pressured Energy sector. Make sure you don’t miss this week’s Money Matters with Gary Goldberg, which airs Sundays at WOR710. Visit our website www.ggfs.com for more details.

Aug 31 2015

Stocks remain volatile amid China, rate hike uncertainty

Market Recap 08/28/15:
 
U.S. stocks ended a volatile week with a flat session on Friday, as confusion over when the Federal Reserve would begin raising rates gave the market little in the way of a defined trend. Stocks fell early in the session after Fed Vice Chairman Stanley Fischer told CNBC that the central bank hadn’t yet decided whether it would raise interest rates next month or not, comments that seemed to go against a statement from another Fed official earlier in the week, who suggested the market’s recent volatility made a hike less likely. Despite that, shares recovered ground in afternoon trading. While a September rate hike would likely be a negative for a market that has recently been roiled over the pace of growth in China, the recent dramatic swings in the market – which took major indexes to their first correction in a few years – have made the market’s valuation much less certain. Volatility is likely to remain elevated, though buyers may be more likely to seek bargains at current levels.
 
Looking ahead:
 
Futures were lower on Monday, as uncertainty over China and the Fed continued to dictate market action. China’s equity market fell again on Monday, and while the decline was not as dramatic as other recent moves, it does suggest that the world’s second-largest economy may not yet have bottomed. Crude oil fell 2 percent, which will likely have a continued negative impact on Energy shares. Investors are looking ahead to the monthly jobs report, which will be released Friday, for a sign of how the economy has been impacted by the recent volatility. While a poor number will suggest China’s problems are spreading to the United States, the market could rally on a weak number, as it may suggest the Fed is less likely to raise rates in September. Make sure you don’t miss this week’s Money Matters with Gary Goldberg, which airs Sundays at WOR710. Visit our website www.ggfs.com for more details.

Aug 28 2015

Wall St set to fall after huge two-day rally

Market Recap 08/26/15:
 
Wall Street stocks rallied on Thursday, with major indexes up more than 2 percent as a strong read on U.S. economic growth offset continued concerns over the pace of growth in China. The day’s gains were broad, with sectors rising across the board and commodities rebounding as well. Crude oil surged 10 percent. The GDP report comes a day after a Federal Reserve official said that a September rate hike was “less compelling” given recent market volatility, suggesting that the central bank would continue to be accommodative for longer. With the day’s gains, major indexes turned higher for the week, which has been extremely volatile. After falling sharply on Monday and Tuesday, the Dow posted its best two-day point gain in its history on Wednesday and Thursday.
 
Looking ahead:
 
Futures were lower on Friday, indicating that major indexes would open about 1 percent lower despite a rally in Chinese shares. The move was an indication that volatility is likely to persist on Wall Street until the situation in China has been resolved or at least stabilized. With little clarity on whether China has gone through the worst of its slump, it will be hard for investors to gauge whether U.S. stocks have fully priced in the impact of slower growth in the world’s second-largest economy. In addition, the annual meeting of central bankers at Jackson Hole continues to go on, which could drive market action in the near term if there is any indication that policies could be changed. Make sure you don’t miss this week’s Money Matters with Gary Goldberg, where the guest will be S&P Capital IQ’s and friend of Money Matters Sam Stovall, as well as Dr. Kristine Gedroic, who will talk about healthy eating and lifestyle habits. Visit our website www.ggfs.com for more details.

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