(As of 7:15 am PST)
Futures
pointed to a lower open for Wall Street Friday after two consecutive days of
solid gains. Today’s open follows another volatile session in China which ended
with the Shanghai index up 4.8% on the day, with much of that gain coming in
the final hour of trading. Speculation that the Chinese government is buying
stocks in an effort to prop up the market propelled shares higher in China. The
artificial pricing will likely lead to more volatility next week. China’s
strong Friday close was not compelling enough for European and US markets.
European stocks sputtered throughout most of the session, with the Stoxx 600 on
pace to finish down slightly on the week. In economic news, Personal Income and
Spending for July rose 0.4% and 0.3% respectively, mostly in line with
expectations. Core PCE prices (an indicator of inflation) rose 0.1%, also in
line with expectations. With inflation largely
“under control” the case for a December Fed rate hike seems to be becoming the
consensus in light of the recent global turmoil that has hit the markets. This
weekend’s annual central banker’s summit in Jackson Hole, Wyoming will be
especially important as investors will look for guidance from the Fed on
setting interest rate expectations heading into the fall. Commodity prices are
higher today with gold up 1% while oil also continues to climb after a record
day yesterday. Interest rates are lower as investors snatched up treasuries.
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