Today’s US opening call provides an update on:
- Stocks look to continue strong week;
- Trading volumes likely to fall significantly next week;
- US GDP and eurozone consumer confidence figures released today..
It’s been a surprisingly good week for stocks, under the circumstances, and it looks set to continue today with futures pointing to a higher open on Wall Street.
Wednesday’s decision by the FOMC to reduce its monthly asset purchases came as a shock to many, with surveys beforehand showing up to 90% of people anticipating no taper. Considering previous reactions to the possibility of tapering, many would have expected the response to be negative.
However, the commitment from the Fed to maintain low interest rates until unemployment falls well below 6.5% completely offset the disappointment from the taper, and was clearly seen by investors as preferential to it. While the threshold wasn’t technically moved, it clearly has been in the minds of the FOMC which has provided comfort to investors.
These gains may continue in the coming weeks, although with the holiday season now upon us, trading volumes will be significantly reduced. The economic calendar will also provide less direction for the markets, making any significant moves unlikely.
The only noteworthy economic release on Friday will be the final revision to the third quarter US GDP figure, which is expected to remain unchanged at 3.6%, on an annualised basis. Any upward revision to this will just be further evidence that the US is recovering well and the FOMC was correct to scale back its asset purchases.
Also being released today will be the eurozone consumer confidence figure, which is expected to remain at -15. While this is still deep in negative territory, highlighting how pessimistic consumers still are, it’s still far better than it was earlier this year. Clearly there is still a long way to go with the eurozone recovery, but it is headed in the right direction, and that is the important thing.
Ahead of the open we expect to see the S&P up 2 points, Dow up 19 points and the NASDAQ up 5 points.
About Craig Erlam
Craig Erlam is Market Analyst at Alpari UK. He joined Alpari (UK) at the beginning of 2012 after four years in the financial services industry, including working at Goldman Sachs. Craig writes market commentary that regularly appears on websites including The Financial Times, Reuters, BBC, The Telegraph and FOX Business. He also provides insight and analysis for clients which he posts daily on Twitter and the Alpari (UK) website. You can also find Craig on YouTube where he gives short market updates, including charting analysis.