U.S. stocks experienced some minor price movements during trading on Aug. 27, after experiencing their latest rally over the last few days.
US Equities Fluctuate
The S&P 500 Index was down less than 0.1 percent, at 1,999.89 by 12:28 p.m. in New York, according to Bloomberg. This slight dip happened as trading volume was 29 percent less than the 30-day average at this time of day.
Financial, energy and technology stocks suffered the sharpest losses in the S&P, while the utility and telephone shares enjoyed the largest gains, the media outlet reported. The Dow Jones Industrial Average moved in the opposite direction, rising 4.17 points to reach 17,110.87. At the time, the Nasdaq Composite Index was largely unchanged.
These indices experienced gains in the next hour or so, with the Dow, S&P and Nasdaq Composite Index hitting 17117, 2,000 and 4,572 by 1:10 P.M. EST, according to The Wall Street Journal. The benchmark groups of stocks are all higher for the year, as the S&P is up 8.2 percent after enjoying 30 record closes in 2014 and the Dow has increased 3.2 percent.
Markets Cope with Geopolitical Concerns
After hitting records on July 16, these two major indices encountered some headwinds as global market participants reacted to concerns about tensions existing in Eastern Europe and the Middle East, the media outlet reported.
However, this turmoil seems to have eased since then, and global market participants have been turning their sights to other matters such as equity valuations and central bank stimulus in recent weeks, according to Bloomberg.
Investors Monitor Fed Statements
Investors around the world have long monitored the statements of Federal Reserve officials to get a better sense of the timeline the financial institution would use for stimulus. Earlier this month, they scrutinized statements made at the Fed’s annual meeting in Jackson Hole, Wyoming.
They tuned in to the communications of Janet Yellen, chair of the financial institution, as well as those made by officials of other central banks. Mario Draghi, president of the European Central Bank, spoke at the Fed’s annual meeting.
Global investors looked to Yellen’s speech to get a better sense of how this central bank head views the labor market. Previously, she identified the jobs situation as playing a key role in the financial institution’s policy decisions.
A stronger jobs market would reduce pressure for her and other policymakers to keep benchmark interest rates near record lows. Global market participants have also paid close attention to the timeline that the Fed uses to taper its bond purchases.
The financial institution recently cut its monthly regimen for these transactions to $25 billion, compared to the $85 billion that the central bank bought every month for longer than a year. Because the federal reserve has cut these purchases several times, global market participants have shifted their focus to the Fed’s interest rates.
Valuation Concerns
The Fed has spent more than $4 trillion on bond purchases in an effort to stimulate the economy, and this expenditure has prompted many market participants to warn that global equity markets could have grown inflated.
In addition, the major U.S. indices have not suffered any corrections since 2012, which has motivated analysts to warn that the benchmark groups of stocks could suffer a temporary decline, according to Reuters.
The S&P’s price-to-earnings ratio is within its historical normal range, the media outlet reported. Investors might take this to mean that the stocks contained are not currently overvalued. However, they could also interpret the ratio to mean that amid all the tailwinds equities are enjoying, they may have a hard time enjoying substantial gains. David Kelly, chief global strategist for JPMorgan Funds in New York, commented on the situation.
“Earnings are good and rates are low, which creates the kind of environment that will keep pushing up markets gradually,” he told the news source. “I’m not concerned about valuation yet, especially compared to fixed income, but I see a yellow light instead of a green light.”
Ethan Anderson, senior portfolio manager at Rehmann Financial in Grand Rapids, Michigan, also weighed in, according to Bloomberg.
“The market is not overly expensive, not cheap either,” he told the news source. “In the absence of strong corporate earnings, you are not necessarily going to see a huge surge in equities over the next 12 months. But the little notch up, on a regular basis, you’re likely to see continue.”
Investors who trade stocks online might want to closely watch the key factors mentioned in this article – including valuations, statements of central bank officials and geopolitical concerns – to be more informed about the equity markets. Staying abreast of these key matters could help them make the right decisions.
U.S. stocks experienced some minor price movements during trading on Aug. 27, after experiencing their latest rally over the last few days.
US Equities Fluctuate
The S&P 500 Index was down less than 0.1 percent, at 1,999.89 by 12:28 p.m. in New York, according to Bloomberg. This slight dip happened as trading volume was 29 percent less than the 30-day average at this time of day.
Financial, energy and technology stocks suffered the sharpest losses in the S&P, while the utility and telephone shares enjoyed the largest gains, the media outlet reported. The Dow Jones Industrial Average moved in the opposite direction, rising 4.17 points to reach 17,110.87. At the time, the Nasdaq Composite Index was largely unchanged.
These indices experienced gains in the next hour or so, with the Dow, S&P and Nasdaq Composite Index hitting 17117, 2,000 and 4,572 by 1:10 P.M. EST, according to The Wall Street Journal. The benchmark groups of stocks are all higher for the year, as the S&P is up 8.2 percent after enjoying 30 record closes in 2014 and the Dow has increased 3.2 percent.
Markets Cope with Geopolitical Concerns
After hitting records on July 16, these two major indices encountered some headwinds as global market participants reacted to concerns about tensions existing in Eastern Europe and the Middle East, the media outlet reported.
However, this turmoil seems to have eased since then, and global market participants have been turning their sights to other matters such as equity valuations and central bank stimulus in recent weeks, according to Bloomberg.
Investors Monitor Fed Statements
Investors around the world have long monitored the statements of Federal Reserve officials to get a better sense of the timeline the financial institution would use for stimulus. Earlier this month, they scrutinized statements made at the Fed’s annual meeting in Jackson Hole, Wyoming.
They tuned in to the communications of Janet Yellen, chair of the financial institution, as well as those made by officials of other central banks. Mario Draghi, president of the European Central Bank, spoke at the Fed’s annual meeting.
Global investors looked to Yellen’s speech to get a better sense of how this central bank head views the labor market. Previously, she identified the jobs situation as playing a key role in the financial institution’s policy decisions.
A stronger jobs market would reduce pressure for her and other policymakers to keep benchmark interest rates near record lows. Global market participants have also paid close attention to the timeline that the Fed uses to taper its bond purchases.
The financial institution recently cut its monthly regimen for these transactions to $25 billion, compared to the $85 billion that the central bank bought every month for longer than a year. Because the federal reserve has cut these purchases several times, global market participants have shifted their focus to the Fed’s interest rates.
Valuation Concerns
The Fed has spent more than $4 trillion on bond purchases in an effort to stimulate the economy, and this expenditure has prompted many market participants to warn that global equity markets could have grown inflated.
In addition, the major U.S. indices have not suffered any corrections since 2012, which has motivated analysts to warn that the benchmark groups of stocks could suffer a temporary decline, according to Reuters.
The S&P’s price-to-earnings ratio is within its historical normal range, the media outlet reported. Investors might take this to mean that the stocks contained are not currently overvalued. However, they could also interpret the ratio to mean that amid all the tailwinds equities are enjoying, they may have a hard time enjoying substantial gains. David Kelly, chief global strategist for JPMorgan Funds in New York, commented on the situation.
“Earnings are good and rates are low, which creates the kind of environment that will keep pushing up markets gradually,” he told the news source. “I’m not concerned about valuation yet, especially compared to fixed income, but I see a yellow light instead of a green light.”
Ethan Anderson, senior portfolio manager at Rehmann Financial in Grand Rapids, Michigan, also weighed in, according to Bloomberg.
“The market is not overly expensive, not cheap either,” he told the news source. “In the absence of strong corporate earnings, you are not necessarily going to see a huge surge in equities over the next 12 months. But the little notch up, on a regular basis, you’re likely to see continue.”
Investors who trade stocks online might want to closely watch the key factors mentioned in this article – including valuations, statements of central bank officials and geopolitical concerns – to be more informed about the equity markets. Staying abreast of these key matters could help them make the right decisions.
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