Thursday, September 24, 2015

Economic Journal - Thursday, 9/24/2015


(As of 7:20 am PST)

US stocks opened to the downside Thursday with investor nerves on edge as disappointing data continued to trickle in furthering concerns around global economic growth. News that central banks in Norway and Taiwan surprisingly cut their key interest rates broke early Thursday and sent caution throughout the global equity markets. A less than stellar durable goods report added to the negative sentiment early, as orders fell 2.0% in August, the first decline in 3 months. Softening business investment and a slowdown in orders for autos, airplanes and machinery dragged on the report. In corporate news, Dow component Caterpillar Inc. announced that they would cut 10,000 jobs by the end of 2018 as a part of a corporate restructure. The mining and construction equipment maker, often viewed as a bellwether for global growth, also lowered its sales outlook for 2015 and 2016. Caterpillar’s announcement caused losses to accelerate in the first hour of trading. In overseas action, Asian markets finished mixed while European stocks traded firmly lower as markets continued to deal with the scandal involving Volkswagen and perhaps now other auto makers. Markets are also gearing up for a speech from Federal Reserve Chairwoman Janet Yellen later today as she speaks at a conference at UMass–Amherst on monetary policy. It is not expected for Yellen to provide clues on the Fed’s rate hike plan, however as usual her speech will be highly scrutinized and potentially market moving. Gold is seeing some safe haven buying today as is the 10 yr. treasury as yields fell to 2.09%.

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