US indices turn lower late in the day

Today has been a much quieter affair after yesterday's thundering gains, with stocks generally in the red on Wall Street.

The S&P 500 resided in positive territory for most of today, but declined late in the session in New York. With less than half an hour to the close on Wall Street, the blue chip index was down 0.12% at 1817.6. The Dow Jones slid more, dropping 0.26% to 15,953. These are modest drops though, especially so within the context of the stock market’s recent gains.

President of the St Louis Federal Reserve James Bullard was speaking at the New York Stock Exchange today and hit some optimistic notes, saying he expects economic growth of 3% this year for the US, despite recent softness caused by adverse weather.

Although Mr Bullard is not a voting member of the FOMC this year, I have found his comments to be useful in the past as his centrist views tend to reflect the consensus at the Fed. He said the central bank will have to tweak its forward guidance, discarding its thresholds in favour of ‘more qualitative judgements’ in light of the ‘dramatic’ fall in unemployment in recent months that have unemployment brushing up against the 6.5% threshold while inflation languishes well below target. This would be a return to more conventional monetary policy.

The US Treasury Budget shows a much smaller deficit for January, narrowing to $10.4 billion from the $53.2 billion seen last in the previous month, with receipts up a sharp 8.2% year-on-year, while spending fell 2.8% year-on-year.

IGA, may distribute information/research produced by its respective foreign marketing partners within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

This information/research prepared by IGA or IGA Group is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. 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. In addition to the disclaimer above, the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.

See important Research Disclaimer.