Yesterday S&P 500 hit historical high, second after NASDAQ | IFCM UK
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Yesterday S&P 500 hit historical high, second after NASDAQ - 22.8.2014

Yesterday the world stock indices continued to rise, due to the weekly positive data on the American labor market. Other US economic indicators also outperformed the forecast on Thursday. For that reason S&P 500 hit the historical high, the second after NASDAQ.

Initial Claims increased to 298,000 people. This value is better than the tentative forecast of 315,000. Let us remind you that the US Non-farm payrolls for July added 209,000. This index has topped 200,000 for the sixth month in a row, for the first time since 1997. The labor market recovery and the low inflation rate are the key factors, defining the Fed monetary policy. Positive data increases the probability of a prompt rate hike in the United States. It should be noted the growth of other indicators, published on Thursday. Existing Home Sales in July rose 2.4% and reached the 10-month high. Manufacturing PMI for August by Markit rose to its highest level since April 2010. Philadelphia Manufacturing Index reached the highest level since March 2011. Leading indicator showed a growth for the sixth consecutive month.

BAC stock chart - Bank of America

Bank of America Corp Stocks upped 4.1%, due to the penalty amount regulation ($16.65 billion) for violations when trading mortgage bonds. Investors have decided that this amount is not critical for the bank. Hewlett-Packard quotes rose 5.4%, due to the good quarterly report. Ebay is planning to establish PayPal payment system as a separate company. Market participants believe that it can be partially sold. It can bring an extra income to Ebay and its stocks increased 6%. The volume of trading on American stock exchanges has remained almost unchanged, which may indicate a low investor activity; meanwhile the quotes are updating the historical highs. The speech of the Fed chair Janet Yellen is expected to be given today at 14-00 СЕТ. She will disclose the department plans regarding the rates changes and the assessment of the American economy state. Some of the market participants take profit from the American currency strengthening; the dollar index is slightly slipping.

European stock indices are now slightly correcting downwards after a substantial rise in the last two weeks. Apparently, we also have volunteers here to take profits before the speeches of Central Bank Heads are made. Let us recall that in addition to Janet Yellen’s speech, the head of the ECB, Mario Draghi, and the governor of the Bank of Japan Haruhiko Kuroda and other prominent economists will give their speeches. According to macroeconomic data, the German economy receives a significant benefit from the European Union existence. Its performance is steadily improving amid the stagnation or even indicator performance recession in other EU countries and the European Union as a whole. Theoretically, it can provide support to the German stock index DAX.

Nikkei follows the European trends today, and has also slightly corrected before the speech of Central Banks Heads. The reduced rating of certain construction and steel companies is also contributing to this fact, which was announced by the major investment bank Daiwa Securities Group. In its turn, Nikkei is supported by the information that the Tokyo authorities are going to invest the public fund money in stocks, 4 trillion yen ($39 billion.).



Grain futures and soybean prices are ticking up, due to the drought in China and very rainy weather in Europe and Canada. This may reduce the global crop. Note that the USDA expects the fodder grain volume to add 13 million tons in the EU and the Black Sea region, due to bad weather conditions. This contributes to lower beef prices.

copper-chart-weekly

The weekly growth in copper prices may be the highest in seven weeks. This is facilitated by the positive data on the American real estate market, which went out on Tuesday and Thursday. Investors hope that the industrial growth slowdown in China will not reduce the copper demand, but at least leave it at the current level.

The increase in sugar prices has paused today. India, the world largest sugar consumer, raised the import duty on sugar, in fact from 15% to the banned level of 25%. The aim is to support local producers. Now, market participants expect that sugar imports into India will be reduced to 30,000 tons in 2014, from 680,000 tons last year. The country consumes annually about 23 million tons of sugar. Its production is expected to be $25.3 million tons this year.

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