(As of 7:25 am PST)
US stock indexes are mixed in the first hour of trading
as investors mulled upbeat economic data with the prospect of a ‘sooner than
later’ rate hike after yesterday’s release of the most recent FOMC meeting
minutes. Economic reports are positive
today. Jobless claims fell 14,000 last week to 298,000, well below
expectations. A “flash” reading of
manufacturing PMI showed activity in August jumping to the highest level since April 2010. Also a strong
reading of the Philly Fed index showed manufacturing activity reaching the
highest level in that region since March 2011.
Lastly, a report on housing showed sales of existing homes rising 2.4%
in July, the fastest pace of the year. The market’s reaction to the strong data has
been muted in the early going. Perhaps
yesterday’s hawkish sentiment in the FOMC minutes is creating a ‘good news is
bad news’ scenario whereby more positive economic data equates to an earlier
move on the Fed’s part to raise interest rates.
Yesterday’s FOMC meeting minutes seemed to indicate some disagreement
within the Fed on when to raise rates.
If the move is to be ‘data-dependent’, today’s upbeat data would be in
support of a sooner than expected rise in rates. The market will be looking ahead to tomorrow’s
speech from Fed Chairwoman Janet Yellen for more guidance on the Fed’s monetary
policy plans.
No comments:
Post a Comment