Markets React To Manufacturing Data, Syrian Airstrikes
US stock futures declined Tuesday morning behind varied data on manufacturing in Europe and China, reported the Wall Street Journal. Dow futures, S&P 500 futures and Nasdaq futures each fell by 0.3%. The markets dipped at Monday’s close as well, but stock futures are not always accurate indicators of indices’ opening moves.
Tuesday, September 23, 2014
“What we're getting is a period of exhaustion for the U.S. markets,” Colin Cieszynski, chief market strategist at CMC Markets, told the Wall Street Journal. He added, markets have “had a huge run and they're overdue for some sort of correction.”
Eurozone decline, Chinese advance
European markets fell amid a survey from data provider Markit indicating weak manufacturing output in September, according the Market Watch. In Germany – Europe’s largest economy – factory growth hit a factor of 50.3, a 15-month low. A number below 50 represents contraction in the sector.
Poor data in the manufacturing sector “have become one of the most conspicuous features of the fragility of a broad-based recovery,” Oliver Kolodseike, economist for Markit, told Market Watch. “It remains to be seen if Germany’s goods-producing sector is in the midst of a slowdown or whether recent poor data present just a temporary soft patch.”
In a different Markit report, manufacturing progression in the Eurozone fell to a 14-month to a reading of 50.5.
On the other hand, in China, early numbers from the HSBC China Manufacturing Purchasing Managers Index revealed improvement, according to the Wall Street Journal. Chinese stocks gained behind the data showing a 0.3 point rise from August to September.
Airstrikes likely to dampen market
The US Air Force, along with Arab allies, carried out its first airstrikes within Syria against ISIS Tuesday morning, reported Bloomberg. As a result, the investors are likely to err on side of caution as geopolitical risk grows.
“There is some nervousness in the market about the airstrikes,” John Kilduff, a partner at Again Capital LLC in New York City, told Bloomberg. “The theater of war is right at the heart of Persian Gulf oil production.”
Traders will watch the situation unfold. Escalation could drive the markets down further. A quick resolution could spur gains, but it seems likely that the conflict will continue.
Guard against geopolitical risk with Nadex
Global conflicts can influence the market and leave investors scrambling to buy or sell assets – often with disappointing results. But the use of binary contracts can help traders hedge against the risks presented by the political world.
A market spike caused by the sudden outbreak of war presents a significant risk to a portfolio. But contracts have built-in floor and ceiling levels, which provide the same protection as a stop order without the risk of being stopped out. The price of the contract always remains between the floor and the ceiling, so investors know their maximum potential profit or loss in advance. Unless they choose to close their position early, it always remains open until expiration. With binary contracts, investors never get stopped out, no matter how much the market moves against them.
This information has been prepared by Nadex, a trading name of North American Derivatives Exchange, Inc., prepared by independent third parties contracted by Nadex or reproduced form third party news agencies. In addition to the disclaimer below, the material on this page does not contain an offer of, or solicitation for, a transaction in any financial instrument. Nadex accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication.