Markets calm ahead of Yellen Testimony

Volatility has eased off after a tumultuous couple of weeks.

Last week ended up a strong week for US stocks after a few bumps and scares. The new week has begun in low-key fashion, with stock prices little changed as investors hold back a day ahead of Fed Chairman Janet Yellen’s first testimony on monetary policy.

By early afternoon in New York, the Dow Jones was down by 0.14% or 21 points at 15,772, while the S&P 500 declined by just 0.01%.

Shares in Apple rose 1.75% after activist investor Carl Icahn announced that he is ending his campaign to push the iPhone maker into buying back $50 billion of its shares this year.

It’s an interesting time for the market to hear from Ms Yellen, hot on the heels of a the second of two successive weak employment reports and not long after the mini-crisis in emerging markets. The Fed has already introduced two reductions in the pace of its stimulus and this is a chance for investors to hear whether Ms Yellen foresees further reductions as the most likely path, as has been suggested in recent comments from other Fed officials.

On Friday we saw non-farm payrolls coming in well below expectations, and no significant revision to December’s very soft payroll growth; given the Fed has said the decision on tapering will be contingent on incoming data, I will be keen to hear what Ms Yellen has to say about the labour market.

The forex market has also been quiet ahead of Ms Yellen’s testimony, with narrow ranges in the major currency crosses. GBP/USD was down just 0.02% with a range for the day of fewer than 50 pips.

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.

Find articles by analysts

This information has been prepared by IG, a trading name of IG Markets Limited and IG Markets South Africa 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. International accounts are offered by IG Markets Limited in the UK (FCA Number 195355), a juristic representative of IG Markets South Africa Limited (FSP No 41393). South African residents are required to obtain the necessary tax clearance certificates in line with their foreign investment allowance and may not use credit or debit cards to fund their international account.