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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 for more details.