Yellen paves the way for rate hike
Published 15-FEB-2017 12:18 P.M.
|
2 minute read
Hey! Looks like you have stumbled on the section of our website where we have archived articles from our old business model.
In 2019 the original founding team returned to run Next Investors, we changed our business model to only write about stocks we carefully research and are invested in for the long term.
The below articles were written under our previous business model. We have kept these articles online here for your reference.
Our new mission is to build a high performing ASX micro cap investment portfolio and share our research, analysis and investment strategy with our readers.
Click Here to View Latest Articles
After weakness in morning trading, US markets resumed their upward trend with the Dow increasing from its previous day’s close of 20,412 points to hit 20,500 points as markets drew to a close.
The release of positive commentary by Federal Reserve Chairwoman, Janet Yellen on the state of the US economy which included the likelihood of rate rises sooner rather than later provided robust support for financial stocks, a sector that has already performed well over the last three months.
There were strong moves from JP Morgan Chase (+1.6%) and Goldman Sachs group (+1.3%).
Once again, all major indices in the US were up with the S&P 500 and NASDAQ set to close at new record highs as the bell approached.
European markets were mixed with the FTSE 100 down approximately 0.1%, closing at 7,268 points.
The DAX was flat, while the Paris CAC 40 gained nearly 0.2% to close at 4,895 points.
On the commodities front, oil continued to be range bound between US$53 per barrel and US$54 per barrel, albeit tracking towards the lower end of that band as markets drew to a close.
Gold traded in a volatile fashion, increasing from the previous day’s close of US$1,226 per ounce to hit a high of US$1,236 per ounce before plunging into negative territory on the back of Yellen’s commentary.
However, there was renewed strength in afternoon trading as the precious metal pushed past US$1,230 per ounce before closing just below that level.
The big news on the metals front was a spike in the iron ore price which was already at long-term highs. The surge of more than 5% which saw it hit US$92 per tonne has some analysts querying whether the bullish run is sustainable.
The last time iron ore traded at these prices was in mid-2014. Sustainable or not, it would appear that the likes of Rio Tinto, BHP Billiton and Fortescue Metals Group could continue their upward momentum today.
Base metals were mixed with the best performance coming from nickel as it touched on US$4.90 per pound, a level it hasn’t traded at since December.
The prospect of a relatively near-term interest rate hike had little impact on the Australian dollar as it remained in the vicinity of US$0.765.
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.
General Information Only
S3 Consortium Pty Ltd (S3, ‘we’, ‘us’, ‘our’) (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 and is for informational purposes only. Any advice is general advice only. Any advice contained in this article does not constitute personal advice and S3 has not taken into consideration your personal objectives, financial situation or needs. Please seek your own independent professional advice before making any financial investment decision. Those persons acting upon information contained in this article do so entirely at their own risk.
Conflicts of Interest Notice
S3 and its associated entities may hold investments in companies featured in its articles, including through being paid in the securities of the companies we provide commentary on. We disclose the securities held in relation to a particular company that we provide commentary on. Refer to our Disclosure Policy for information on our self-imposed trading blackouts, hold conditions and de-risking (sell conditions) which seek to mitigate against any potential conflicts of interest.
Publication Notice and Disclaimer
The information contained in this article is current as at the publication date. At the time of publishing, the information contained in this article is based on sources which are available in the public domain that we consider to be reliable, and our own analysis of those sources. The views of the author may not reflect the views of the AFSL holder. Any decision by you to purchase securities in the companies featured in this article should be done so after you have sought your own independent professional advice regarding this information and made your own inquiries as to the validity of any information in this article.
Any forward-looking statements contained in this article are not guarantees or predictions of future performance, and involve known and unknown risks, uncertainties and other factors, many of which are beyond our control, and which may cause actual results or performance of companies featured to differ materially from those expressed in the statements contained in this article. S3 cannot and does not give any assurance that the results or performance expressed or implied by any forward-looking statements contained in this article will actually occur and readers are cautioned not to put undue reliance on forward-looking statements.
This article may include references to our past investing performance. Past performance is not a reliable indicator of our future investing performance.