Us Stock Futures’ Outlook Remains Positive
US stock futures gained this morning, despite negative manufacturing data from China and Federal Reserve minutes revealing a hawkish mentality.
Thursday, August 21, 2014
Economists’ optimism prevailed partially due to falling unemployment claims. As a result, the S&P 500 is within reach of an all-time high. Futures for the S&P 500 and the Dow increased by 0.2% each, while the Nasdaq rose by 0.1%.
Jobless claims fall
The weekly US jobless claims report indicated that rates are dropping, as 14,000 fewer people filed for state unemployment benefits in the week ending August 16 than the prior week. The total came in at 298,000, just shy of the 300,000 expected by a group of analysts polled by Reuters.
The four-week mean of jobless claims fell by 8,500 between July and August, implying another month of employment gains. The improving labor market conditions will likely influence the Federal Reserve’s stance on interest rates, as the advancement could point to a recovering economy.
Federal Reserve hints at lowered stimulus
Yesterday’s minutes from the Federal Reserve’s July meeting revealed their economic stimulus efforts could halt sooner than expected, Bloomberg reported. The central bank has enacted three sets of stimuli since 2009, during which time the S&P 500 has nearly tripled.
Janet Yellen, chairwoman of the Federal Reserve, will give a speech tomorrow that will offer investors a better idea of the central bank’s direction. “The US economy is in reasonable shape. The task for central banks - and Yellen is at the forefront - is how to wean markets away from almost unlimited liquidity provisions when the economy is recovering but remains fragile,” Global Equities Economist Peter Gibson told Bloomberg.
It will be a delicate balancing act from the central bank to preserve the slow but steady growth while removing some of their safety nets.
Chinese manufacturing slumps
Today, an early Chinese manufacturing report for August revealed an alarmingly steep decline in growth, building on a trend set in July, according to the Wall Street Journal. Signs of the drop include fragile investment demand at home, a sudden fall in credit and three straight months of lower housing sales.
China’s disappointing data figures to be a wet blanket on hopes for a strengthening global economy. The country has a history of growth, and could have provided a jump-start to the sluggish economic movement worldwide. Unfortunately, the second-largest market in the world does not look poised to pick up by the year’s end.
“I'm really not sure the future looks so great, so we just try and control costs we can control,” Wu Sheng, a metal-products exporter in Shenzhen, China, told the Wall Street Journal. “I don't feel there's been much improvement from the policies. The government isn't doing enough to help business.”
Nadex offers legal binary options trading
Trading binary options through Nadex is a great way to hedge against your stock investments. Nadex is a regulated exchange in the U.S. where you can become a member and trade directly on the exchange as a retail participant.
Designed primarily for retail traders, Nadex provides you with direct access to contracts based on a range of global markets – without the need of a broker to act as a middleman. And we protect your funds by holding all member funds in a segregated account with a major US bank.
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.