Wall Street looks set to increase gains after the Fed prepares to rein in support, Evergrande concerns ease and jobless claims unexpectedly rise.
Stock aim higher as risk sentiment rises
US socks are set for a robust open building on gains from the previous session following the Fed announcement an easing of concerns over Evergrande and and surprise rise in initial jobless claims.
US initial jobless claims unexpectedly rose for a second straight week highlighting the choppy nature of the labour market recovery. Unemployment claims rose to 351,000 when analysts had expected a decrease to 320,000. broadly the amount of initial claims are falling across the economic recovery. However, the labour market appears to possess hit a soft patch. this is often by no means a replacement trend, but certainly does catch the attention , particularly after last month’s weak NFP.
The data comes following the Fed policy announcement. needless to say , Fed left monetary policy unchanged. The Fed also decided against announcing the beginning of asset purchase tapering. Instead, the financial institution pushed back the formal announcement saying that the time was approaching when tapering purchases might be warranted. The Fed hinted that a proper announcement for tapering might be within the November or December meeting.
Whether it’s the very fact that the taper has been dialed back or that the Fed have removed a component of uncertainty by explicitly talking about tapering; either way the market is during a happier place than it had been at the beginning of the week.
Attention will now address the newest PMI data for clues over the health of the economy. Expectations are for both manufacturing and repair sector activity to possess picked up in September.
Where next for the Dow Jones?
The Dow Jones is extending the rebound from the weekly low and is approaching resistance at 34500 a key support turned resistance. A give way this level will expose the 100 sma at 34700 and negate the near term bearish bias. A move above the 50 sma at 3500 could see the buyers gain traction.Oil eases but remains at two month highs
Oil prices are easing lower but trade near two month highs on the rear of tight US supplies. Both Brent and US crude jumped 2.5% within the previous session following EIA petroleum stock pile data which revealed that stocks fell by 3.5 million barrels to 414 million rock bottom level since October 2018.
The Gulf of Mexico production is returning, but slowly. Meanwhile, gas prices are still elevated offering a supportive structure for oil prices.