19th August 2014 - US Market Review
Major US Indexes:
Dow Jones 16,838.74 (+1.06%)
S&P 500 1,971.74 (+0.85%)
Nasdaq 4,508.31 (+0.97%)
As US markets head back to the highs last seen in July yesterday, the positive effect is expected to be felt across the remaining global indices and the week progresses.
Yesterdays better than expected housing data out of the US saw the highest sentiment of Home Builders since early January and is the 3rd month that sentiment had increased. Today see's the release of more housing data, along with key inflation figures which are expected to have reduced slightly on last month's forecasts.
It is a busy week in the US for economic indicators and on Wednesday, along with mortgage data the notes from the Fed's July meeting will be released.
What many will be looking for is an indication as to whether a possible early rate hike is on the cards. General sentiment leads to a rate increase in the second half of 2015 however many analysts have said that there is a chance that if the economy and specifically the employment sector continue to improve the way they have, there is a distinct possibility that this could be brought forward. The one thing that would slow this down would be the apparent disparity in wages we are seeing as inflation slowly creeps up and wages staying stagnant it would be a hard decision to implement as making borrowing money more expensive would have a negative effect on consumer spending, the largest part of the US economy.
Once the FOMC notes have been released we can then expect more data on Thursday and Jobless claims and the Markitt Manufacturing PMI Flash will be released amongst other. Jobless claims are expected to have continued to fall, even if marginally and we will end out the week with Janet Yellen speaking for the first time at Jackson Hole. As with nearly all of her recent speeches, very little in the way of real information is expected however there is always hope that a more firmer approach to a rate hike time frame can be given.
This week should see the markets remain positive as the crisis in Ukraine appears to be slowing down and as ISIS start to lose ground in Iraq there could be a short period of calm as the US, the Worlds global police look like they actually might be doing some good for a change, only time will tell.
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