(As of 7:19 am PST)
Markets are quiet to start this morning with the major
indexes inching higher. Gold and oil
are taking a beating, leading commodities lower as the US dollar is down
slightly. Economic data is light although
a report showed the US trade deficit widened sharply in July after dropping
significantly in June. The trade gap
jumped 13.3% mostly due to higher oil prices and an increase in auto imports. A widening trade deficit is not good for US
growth as more dollars leave the US for overseas goods. Support for a military strike on Syria grew
on Capitol Hill yesterday, with several House and Senate leaders speaking out
in support for President Obama’s plan. The
remaining challenge for lawmakers is agreeing to the scope of the strike. Although Syria is a major concern, the bigger
issue facing markets continues to be the Fed’s timeline for tapering its bond
purchases and the resulting impact of rising interest rates on the
economy. The latest release of the Fed’s
Beige book is due out today which will likely shed some light on whether rising
rates are taking a toll on growth.
September is known as one of the worst months for the stock market
historically, and with a lot of negative events on the horizon, expect market volatility
to pick up as the weeks go on.
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