Spreadex Market Update
Dow sees sharp jump at open despite hawkish comments from FOMC members
The Dow Jones opened sharply higher this afternoon, recovering the majority of the gains it abandoned following the announcement of the Hanover bomb threats yesterday evening. Whilst a worse than expected fall in the (notable if inessential) US housing starts played a part, the main culprit for this growth appears to be Apple, with the tech-giant jumping 3% after the bell as Goldman Sachs gave the stock a much-coveted ‘conviction buy’ rating.
What makes the Dow’s 100 point jump more remarkable is the generally hawkish tone struck by certain FOMC members this afternoon. William Dudley stated that he doesn’t expect a ‘huge surprise’ or major market movement when rates are eventually hiked, whilst Dennis Lockhart was more forthcoming, claiming that he is ‘comfortable with moving off zero soon’. Slightly less surprising were the pro-lift off comments of Loretta Mester, who claimed the US economy could withstand a small hike, and resident super-hawk Jeffrey Lacker, who reaffirmed his belief that an imminent interest rate rise is needed. Investors will get to see how these views stack up with those expressed in October’s Fed get-together, and the wider stance of the central bank in general, when the latest FOMC meeting minutes are released this evening.
Over in Europe and the region’s indices were largely taken away from their lows by the afternoon’s strong US open. The FTSE managed to creep into the green by around 10 points, whilst the DAX and CAC, after flirting with gains, continued to fall by (a shrunk) 20 and 35 points respectively.
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