(As of 7:20 am PST)
Markets are trading near the
unchanged line to begin the session with the Dow and S&P500 just shy of
setting new record highs. A string of disappointing manufacturing data has
investors fumbling for direction in the early going. The Empire State
Manufacturing index recovered in May after declining in April, but fell well
short of expectations. A report on industrial production also missed estimates
adding to the recent wave of mixed data. Overseas action is mixed with Asian
markets finishing Friday’s session higher while Europe is down slightly. Gold
and oil are giving back some of yesterday’s gains while interest rates are also
on the decline. With yesterday’s rally on Wall Street, US indexes look on pace
to finish the week with weekly gains despite a volatile start to the week. Disruption
in the global bond markets, which caused selling pressure earlier in the week,
seems to have dissipated while weak economic data has now caused speculation
that the Fed will wait until the September-December period to raise interest
rates. A breakout to the upside seems
far-fetched yet the market has also proven to be resilient any time we have a
sell-off. As a result, we seem to be in
this range bound trade that doesn’t look to be changing any time soon.
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