(As of 7:28 am PST)
After
two consecutive days of steep losses, stocks have opened flat to start the
Friday trading session. Economic data
remains mixed. Reports on the housing
sector continue to support a strong housing recovery. Construction on new US homes climbed 5.9% in
July, while building permits (sign of future demand) rose 2.7%. US productivity edged up in the second
quarter but the year-over-year gain marked the slowest since 2008. Some would argue, including Atlanta Fed
President Dennis Lockhart, that productivity growth is in a “temporary
downdraft” due to a pickup in hiring from the recession. He indicated that productivity remains a key
data point the Fed is watching to determine when and how to taper its stimulus
program. As long as data is mixed, the
uncertainty surrounding the taper will bring higher volatility to the markets
over the coming weeks. Asian markets
finished the day lower on Wall Street’s beating yesterday, while Europe is in
flux. Expect volatility to pick up as
the day progresses and investors analyze their portfolio positions after a week
that saw some of the worst losses on the year.
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