Positive economic data pushes Dow to new highs despite rate implications

By Trevor Hoey. Published at Feb 16, 2017, in Features

Data released in the last 24 hours in the US has all pointed to a more inflationary environment, arguably seeing the odds firm for a March rate increase, with some analysts now tipping that there will be four rather than three rate rises in 2017.

Investors weren’t perturbed by the prospect of rate rises, seemingly of the view that a healthy fast growing US economy will support business earnings, another reason to stay on the stock market rollercoaster.

The Dow hit an intraday high of 20,620 points in the last hour of trading before closing at 20,611 points, up from the previous day’s close of 20,504 points, representing a gain of approximately 0.5%.

The NASDAQ also performed strongly, and it was just off its intraday high of 5822 points as markets drew to a close, representing a gain of more than 0.6%.

Positive sentiment rubbed off on European markets, and similar to the US it was stocks in the financial sector that performed strongly.

Market commentators are tipping an early rate rise in the US could see Europe follow suit. As banks benefit from a higher interest rate environment, the rally in financials wasn’t surprising.

The FTSE 100 increased circa 0.5% to close at 7302 points. Mainland European markets were also strong with the DAX up 0.2% to 11,793 points, and the Paris CAC 40 rallying 0.6% to close at 4924 points.

Gold also made its most significant rally for more than a week as it gained 0.6% to finish at US$1233 per ounce.

After hitting US$53.50 per barrel in mid-morning trading, oil gave up all of its gains to close in the vicinity of US$53 per barrel.

Iron ore was relatively flat, but is still hovering above the US$90 per tonne mark.

Base metals were mixed with copper and nickel gaining ground while zinc and lead declined. However, at US$1.31 per pound, zinc isn’t far off the multi-year high of US$1.33 per pound struck less than a week ago.

Nickel delivered the most substantial gain as it rallied approximately 2% to close at US$4.95 per pound.

The Australian dollar increased sharply to push above the US$0.77 mark for the first time since November 10.

In Australia, it is a busy day on the reporting season front as Telstra, Origin Energy and Sydney Airport to name a few, release their results.

It should be noted that broker projections and price targets are only estimates and may not be met. Also, historical data in terms of earnings performance and/or share trading patterns should not be used as the basis for an investment as they may or may not be replicated. Those considering this stock should seek independent financial advice.

View Our Investment Portfolios

S3 Consortium Pty Ltd (CAR No.433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information only. Any advice is general advice only. Neither your personal objectives, financial situation nor needs have been taken into consideration. Accordingly you should consider how appropriate the advice (if any) is to those objectives, financial situation and needs, before acting on the advice.

Conflict of Interest Notice

S3 Consortium Pty Ltd does and seeks to do business with companies featured in its articles. As a result, investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this article. Investors should consider this article as only a single factor in making any investment decision. The publishers of this article also wish to disclose that they may hold this stock in their portfolios and that any decision to purchase this stock should be done so after the purchaser has made their own inquires as to the validity of any information in this article.

Publishers Notice

The information contained in this article is current at the finalised date. The information contained in this article is based on sources reasonably considered to be reliable by S3 Consortium Pty Ltd, and available in the public domain. No “insider information” is ever sourced, disclosed or used by S3 Consortium.

Australian ASX Small Cap stocks | Why Finfeed.com is Australia’s leading small cap publication

Founded seven years ago, Finfeed.com is Australia’s leading and longest standing website for investor and finance news, education and expert opinion.

Published by StocksDigital, Finfeed was created to report daily on the comings and goings of ASX listed stocks in the small cap market.

As the first digital publication dedicated specifically to this space, Finfeed soon became the most trusted publication in the market, quickly garnering over two million page views – a number that continues to rise.

Finfeed.com provides its readers with informative articles that tackle the latest in market moving #ASX small cap news, plus exclusive content you won’t find anywhere else. It is aimed at those with an interest in investing, market education, company performance, start-ups and much more.

Finfeed.com is the only media organisation operating under the strength of a Financial Services License and is backed by leading journalists and analysts all with brands of their own.

The website aims to inform, educate and entertain with content that drills down into the heart of financial matters.

Finfeed is a leading source of investor and market information, with everything investors need to know about how to invest written in a way that anyone can understand. 

Over the years, the website has expanded beyond exclusively reporting on small caps, to profile Australia’s leading ASX listed small, mid and large caps as well as some of the country’s most successful CEOs and business leaders to find out what makes them tick.

Every day you will find fresh content covering:

Fast Facts

Over 4,000 articles published

Over 2.3 Million Page Views and counting

Over 10,000 followers on social media

Subscriber list growing by 2% monthly

Thanks for subscribing!