All three major indices saw a strong open on the morning of April 29 after a two-day drop in Treasuries that came ahead of the Federal Reserve policy meeting that is scheduled for later this afternoon.
Wednesday, April 30, 2014
As of 11:30 a.m. Eastern, the Dow Jones Industrial Average was up 64.02 points, or 0.39 percent, to reach 16,512.76. This brings it slightly closer to its April 4 high of 16,609.85. The Nasdaq matched the Dow's improvement, also gaining 0.39 percent, or 15.9150 points, to reach 4,090.3160. However, the index still has some distance to cover to get back to 4,283.0260, its one-month high reached on April 3. The S&P 500 had the worst performance of the three, though by a slim margin. With a gain of 0.37 percent, or 6.99 points, the index sat at 1,876.42. This brings it closer to its April 4 high of 1,894.52.
Markets react to national news - There is plenty going on in the U.S. for the markets to respond to. Aside from the Fed's aforementioned two-day policy meeting, which is likely to decide how the central bank will move forward with the stimulus package, the Conference Board's index of U.S. consumer confidence was released today. According to the report, confidence decreased from a score of 83.9 in March to 82.3 in April.
While this seems like bad economic news on its face, industry experts are likely to see this as an indication that the Fed will maintain its stimulus package, which is good news for the markets. "The economy is in a sweet spot," financial advisor Patrick Spencer told Bloomberg. "Growth isn't so exuberant that the Fed needs to withdraw their support quickly, and not so anemic that they need to be concerned about further weakening." Investors are also looking forward to more reports that are scheduled to be released later this week regarding gross domestic product and hiring news this past month. From that data, it will become clearer whether the economy is bouncing back from a particularly severe winter. It seems the market is going to remain calm ahead of the reports, as investors look for indications of how the rest of the year is likely to play out.
Trading ahead of news with Nadex - Before major announcements that are expected out of the Fed or from reports, traders may struggle to establish which way the market is expected to swing. However, by looking at different risk/reward scenarios with capped risk, short-term binary options, traders may be able to take a view regardless of market outcomes.
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