Equities Trading Mixed Hinged On Fed Speakers

 

US stocks ended little changed yesterday, with the Dow recouping much of a 206-point deficit, as investors balanced worries about global growth against mostly better-than-expected US earnings and economic reports. European stocks closed in negative territory yet again Thursday, but the major averages finished well off session lows after some encouraging economic news from the United States.   

Global markets showed some signs of stabilization on Thursday after their most turbulent day in four years, but worries about world growth and the end of years of US stimulus kept investors in a fraught mood. European stocks bounced 1 percent as the region’s bourses opened after Wednesday’s 3.2 percent plunge, but fell back into the red soon after on concerns about a bond market sell-off in the debt of peripheral euro zone countries. In the currency markets, the US dollar started to slip again after one of its sharpest drops of the year while the safe-haven Japanese yen and gold both held on to most of their gains, leaving them near their highest in a month.  To say that the market’s patience for weaker-than-expected reports will be limited is an understatement.” Assets which depend on economic growth, such as shares and oil, have been hit by a raft of weak indicators from Europe at a time when other big economies, including China, Japan and Brazil face their own hardships. 

 Investors remained cautious, and the sell-off could continue if US earnings fail to ease worries about weak global demand. Investors also have been rattled by a widening Ebola scare and plunging oil prices. The S&P 500 is still off 7.4 percent from its Sept. 18 record closing high and is up just 0.8 percent for the year so far. 

 Asian equities rose from a six-month low after a Federal Reserve official said the central bank should consider delaying the end of bond purchases and U.S. data eased concern over the global economy. The  MSCI Asia Pacific Index climbed 0.1 percent to 134.93 after closing yesterday at the lowest since March 25. The gauge is heading for a sixth straight weekly decline as faltering recoveries in China and Europe spark concern global economic growth will slow and the Fed considers when to raise interest rates.  

“Markets in Europe, Australia and Japan are looking attractive,” said Steven Milch, Sydney-based chief economist at Suncorp Group Ltd. “I don’t think the fundamental picture has changed significantly. U.S. data overnight was pretty good. The Fed needs to balance what is clearly a strong economy against some of this financial market volatility.” Market focus seems to be aimed at the US Federal Reserve and Fed speak as many Fed members have been hitting the speaking circuit this week. Traders are wondering what the Fed will make of the US slowdown and its effects on the future interest rate increases.