Aug 6th 2014 – Stocks Shake off Putin Jitters
Market View:
After stumbling early on, stocks recovered to close higher. Just a few days ago the S&P 500 appeared to be on a path to break through the 2,000 mark for the first time ever. Now the index of U.S. stocks is having trouble keeping its head above 1,900. Similarly, the Dow, which crossed 17,000 for the first time in early July, is around 16,500.
It is impossible to tell what will happen next as the geopolitical instability caused by Russia ensues. If it was just about the market I would say that we would almost certainly be heading higher from here to at least make a significant lower high on the Indexes. But with the Ukraine still in crisis and fighting escalating, we will just have to wait and see.
Market News:
U.S. stocks advanced, with the S&P 500 making a limited comeback off a two-month low, as investors sorted through developments in Ukraine and considered two derailed deals.
Strategists said technical factors were in play, with the S&P 500 holding 1,920 at Tuesday’s close seen as bullish, as well as Wednesday’s testing and bouncing back off of the prior session’s intraday low of 1,913.
Equities offered little reaction to a report from the Commerce Department, which said the nation’s trade deficit narrowed more than expected in June, suggesting trade was less of a drag on second-quarter economic growth than previously thought. Goldman Sachs and JPMorgan hiked their prior and current-quarter growth expectations on the heels of the report.
Europe’s economic data on Wednesday showed Italy falling back into recession, and German factory orders declining 3.2 percent in June from the month before, with the disappointing numbers illustrating the impact of sanctions against Russia, a major trading partner for Germany.
Russia President Vladimir Putin on Wednesday moved to ban agricultural and food products from nations that have enacted or backed sanctions against Russia.
Sea of red overseas: European markets tumbled overnight amid fresh evidence of the pain being inflicted by the crisis in Ukraine and slow growth in general. But the major indexes trimmed their losses in recent action.
Germany’s Dax index fell almost 1% before rebounding somewhat as a new report showed factory orders unexpectedly fell 3.2% in June. The government blamed “geopolitical developments and risks” for the slump.
Italy’s stock market dropped 2.7% on new data revealing the country’s economic fall back into contraction mode during the second quarter.
Meanwhile, nearly all Asian markets ended the day with losses. Japan’s Nikkei fell 1% Wednesday – leading the index to a full 3.1% drop over the last five trading days. China stocks were steadier, as they continue to bounce back from first half losses.
Thursday
Earnings: Wendy’s, Orbitz, CBS, Monster Beverage, News Corp, Nvidia, Mylan Labs, AMC Networks, Zynga, Lionsgate, Sprouts Farmers Market, Windstream,Duke Energy, Sempra Energy, Stratasys, Teradata, Computer Sciences, GreatPlains Energy
Weekly chain store sales
8:30 a.m. Initial claims
3:00 p.m. Consumer credit
News Sources: CNN Money & CNBC