S P500: Is the up-trend will continue?
TECHNICAL ANALYSIS
US stock indexes rather sensitive
responded to comments Federal Reserve Chairman Janet Yellen and other representatives
the US central bank’s last economic symposium in Jackson Hole. “AT
Fed expected to moderate GDP growth in real terms, continued
recovery of the labor market and the acceleration of inflation to 2% in the next few years.
On the basis of these prospects the Federal Reserve’s economy continues to consider appropriate
a gradual increase in rates over time “, – said Yellen.
Janet Yellen expressed confidence that “the arguments
in favor of raising key interest rates have increased in recent months. ”
Market participants reacted to the controversial speech by Janet
Yellen, as She also pointed out that interest rates are likely to remain close
historic lows in the next year, and possibly longer.
More specifically spoke Fed Vice Chair Stanley
Fisher, who believes that the US central bank may raise rates
next month.
However, Fischer added that "we can not
to say until we see the data".
Now, market participants will closely monitor the
coming from the US macroeconomic indicators, to assess the probability of
increase in US interest rates at a meeting of the Committee on Open Market
Fed, scheduled for September 20-21.
In mid-August, US stock indices reached
time highs. For the first time since December 31, 1999, all three indices
DJIA, D P500, Nasdaq reached record levels in one day.
Higher oil prices, fears of a weakened
the state of the world economy after the referendum on Brexit, Fed comments
according to which “short-term economic risks are reduced” for the economy
The United States, as well as a low probability of interest rate hikes in the US in the coming months
contributed to preservation of positive dynamo of American stock indices. Now
The situation has changed in the market.
On Friday (12:30 GMT) report will be published on
the number of new jobs outside agriculture in the USA (NFP) for August,
which can increase the chances that the Fed is likely to start operations
in the near future. the growth rate is expected to be 180 000 new jobs
places. Strong data on the number of jobs will increase the likelihood of imminent
rate hike, which will strengthen the US dollar and a negative impact on the US stock
market as increase the cost of borrowing to buy shares.
The recent rally may be questioned.
According to CME Group, interest rate futures indicate
21% chance of a rate hike in September, while on Friday the probability
It was 33%, and Thursday – 21%. The probability of a rate hike at the end of the year
It is about 52%.
At the same time, Janet Yellen said in a
the long term it is believed that "when the central bank decides to increase
interest rates, which means that the country’s economy and the company showed
very good results". This speaks in favor of preserving the positive
the dynamics of the US stock market. Bull market when the recession fades, but it can
preserved at a moderate and smooth raising rates.
Thus, the relative prospects intrigue
interest rate increase in the US persists
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