(As of 7:15 am PST)
US stocks rebounded today
after yesterday’s sharp selloff which sent the Dow Jones tumbling 261 points in
a memorable session which included a 3.5 hour trading halt on the NYSE.
Investors are back in the buying mood today following a relief rally in China
overnight which sent Chinese stocks soaring 5.8% - their biggest daily gain in
six years. This, of course came a day after Chinese markets tumbled adding to
the Chinese selloff which has wiped out nearly $4 trillion in value from
Chinese equities over the past month. In Europe, stocks rallied over 2% while
investors awaited new reform proposals from Greece set to be delivered before
midnight tonight. At home, investors seem to have forgotten about yesterday’s
frenzy of activity which included the shutdown of the New York Stock Exchange
(NYSE) mid-morning. The halt in trading was attributed to a technical glitch on
the exchange. Data is light today although a report which showed jobless claims
increased more than expected last week, may also be adding to investor enthusiasm
today. Any signs of weakness in the labor market tend to lead to speculation that
the Federal Reserve may push back its timeline to raise short term interest
rates. Speaking of the Fed, several Fed officials are set to give separate
speeches today, a day after the release of the most recent FOMC meeting minutes
showed only 1 of the 10 central bank officials voted for a June rate hike. The
timing of the Fed rate hike remains an important issue for the market, however
its implications have largely been overshadowed by Greece and China the past
few weeks. Expect the subject to resurface as we head deeper into the third
quarter. Oil is making a comeback today, up 2.5%, while gold is flat. Interest
rates are up as is the US dollar.
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