Spreadex Market Update
Yellen-boosted indices continue to post 3 digit gains, final Q2 US GDP figure to come
In an interesting turn of events, Yellen’s vaguely hawkish comments last night appear to have boosted a previously rate-hike fearing market, causing the abrupt switch from the harsh intra-day losses seen on Thursday to the gung-ho gains of Friday morning. The Dow futures are currently pointing to a near 250 point jump at the US open, the sustainability of which will likely be dictated by this afternoon’s final US second quarter GDP figure.
Analysts are expecting the confirmation of the previously provided 3.7%, a healthy number that likely enhances the chances of an October or December lift-off (even if August’s China-chaos could cause a starkly different picture for the Q3 figure). How the Dow Jones reacts to this number should be enlightening; for the majority of 2015 any positive piece of US data has been a price-eroding factor for investors fearing the effects of a rate-hike. Yet today seems like the markets view of an increase in interest rates might be changing. The Dow will likely also be lifted by a stellar start to the day from Nike, with the company’s shares rising 8% after hours on Thursday following its superb, China-boosted, first quarter report.
The European indices showed no real signs of slowing down this morning, with the FTSE and CAC maintaining their 150 point rise, whilst the DAX at points was grazing a 300 point jump on the day’s opening price. The rebound from the majority of the European auto-sector seems to be fuelling the German index’s growth, even if Volkswagen is barely at the beginning of what is set to be an arduous, and costly, end to 2015.
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