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.