Tradeline Financials - US Markets Update - Week 30, 2014
As global markets forge ahead, the rising political tension in several regions doesn't seem to be affecting the main indexes in the United States.
With the Dow Jones staying over 17,000 and the S&P500 looking ever closer to 2,000, the question is, when will this bull run end.
Recently the IMF reduced its forecast for the US economies expansion in 2014. Earlier in the year the economy was predicted to expand by just 2%, now, after the 2nd quarter the IMF has reduced that to 1.7% for 2014's growth.
The IMF has said that the inclement weather seen in the US at the beginning of the year is the main culprit however when you look at the market's performance it is hard to see where the IMF is drawing its data from.
With unemployment almost at 6% and increasing productivity and manufacturing gains, many believe the US is well in expansion, not recovery, and that includes the Federal Reserve.
Since her appointment Ms. Yellen has continued her line that the economy is expanding, but that caution is needed. With the Fed's asset purchasing being reduced month by month the only real question left is when will rates increase. Many assumed this would be later in 2015, around October but now this could be brought forward, even as early as the second quarter.
Reportedly, 68% of the companies that had reported so far this season had beat expectations. So why is the economy going to expand at a lower rate than originally thought? Well, reasons out of the IMF really only point to the beginning of the year, not what will happen in the last 5mths so its quite possible they may be looking to instill some caution in the US markets considering the S&P is up over 8.5% YTD and the Dow is up just under 4% at 3.9%. The bull market that has been 2014, so far shows no sign of slowing.
Major Indices as of 25th July 2014:
Hang Seng - 24,135.59 -0.02%
Dow Jones - 17,083.80 -0.02%
FTSE 100 - 6,821.46 +0.34%
DAX - 9,794.06 +0.42%
MICEX - 1,408.80 +0.16%
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