Dow breaks above 16,000 on jobs optimism

The strength of today’s economic data has caused a broad rally on Wall Street, with investors apparently shrugging off concerns that the Fed could taper sooner rather than later.

The major US stock index benchmarks have broken back above key psychological levels today, with the Dow reclaiming the ground above 16,000 and the S&P 500 crossing 1800. After struggling all week, it is quite a dramatic turnaround, with the S&P 500 now flirting with making overall gains for the week.

With less than half an hour of trading remaining, the Dow was up 1.13% at 16000, while the S&P was up 1.04% at 1803.5.

Data released today suggests consumer sentiment has turned around, rising at a key moment in the year when retailers look for a bump in sales over the Festive shopping season. Along with the advances shown in the November employment report, this should help the US economy to grow at an increased pace.

I still think with inflation running under target and with fiscal issues up ahead in the New Year, the Fed will be cautious about announcing a taper before 2014, but the strength of this data may lead them at the next FOMC meeting to heavily signpost their intention to reduce stimulus in the immediate future.

Next week will be a lot quieter in terms of economic releases, with US retails sales data on Thursday being a highlight.

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

CFD’s zijn complexe instrumenten en brengen vanwege het hefboomeffect een hoog risico mee van snel oplopende verliezen. 79% van de retailbeleggers lijdt verlies op de handel in CFD’s met deze aanbieder.
Het is belangrijk dat u goed begrijpt hoe CFD's werken en dat u nagaat of u zich het hoge risico op verlies kunt permitteren.
CFD’s zijn complexe instrumenten en brengen vanwege het hefboomeffect een hoog risico mee van snel oplopende verliezen.