30th July 2014 - US Global Economic News
Dow Jones 16,912.11 (-0.42%)
NASDAQ 4,442.70 (-0.05%)
S&P 500 1,969.65 (-0.45%)
Today see's the Fed complete another 2 day session before making their report on GDP for the 2nd Quarter.
Anticipation led Asian markets higher on Wednesday trading, with the local indexes up close to 6 year highs.
Later today the Fed will announce its 2nd Quarter GDP report which is forecast to have eclipsed the first quarter and have expanded between 3% - 3.3%. The increase from the first quarters poor 2.9% drop is seen as a major indicator that the economy has improved and that rates could be increasing sooner than initially thought. Ms. Yellen, the FED chair will not be making an announcement after the results yet in the report it is expected to confirm a range of factors helped contribute to the turn around.
With such a poor start to the year being attributed to the terrible weather across the country and an economy that has continued to improve the 2nd quarter results have effectively set the GDP growth straight for the year.
Improved unemployment figures so a 2nd month at 6.1% and it is estimated that over 231,000 non farm payroll jobs will have been added in July, this will be the 6th consecutive month that 200k plus jobs had been added to the market.
Another key factor helping the economy is increased consumer spending and better business inventories, both of which were poor in the 1st quarter predominantly due to the inclement weather. Now with consumer spending, which equates to almost two thirds of the US economy being back on track, up to 2% over the 1st quarters 1% and this in turn bringing up domestic demand it is possible to see the Fed start talking about rate increase a bit more in detail.
Another round of asset buying cuts is expected to be announced. The reduction is due to be completed in October and should bring us closer to the end of QE form the FED.
With earning season proving to be another winner and an economy well and truly on the mend this week should see the markets return to the green and possibly see the S&P break 2,000 for the first time.
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