Wow! What a week! After recent downward pressure on the markets related to fears of early tapering of the US Federal Reserve’s $85 Billion dollar a month bond buying program the markets have surged to new highs off of comments by Reserve Chairman Ben Bernanke that “Highly accommodative monetary policy for the foreseeable future is what’s needed,” he said.
Bernanke could further cause the markets to see sunny days as he delivers semi-annual testimony to House and senate panels which will give him an opportunity to clarify Fed strategy of reducing the bond buying program more slowly than previously hinted at. Reaffirming this position will help support recent stock market highs reached after previous comments about tapering the bond buying program in early summer which has caused recent volatility in markets by way of quick sell offs in previous weeks.
The week ahead, on a whole, should be quite interesting beyond Bernanke’s testimony and China GDP data, with markets keeping a close eye on earnings and US government reports such as CPI, Weekly Jobless claims report, retail sales numbers and industrial production. For earnings reports, the market will be waiting on figures from some of the big names like Google, Amex, Microsoft, Johnson & Johnson, Coca-Cola, Goldman Sachs and others.
China started the week up as markets were relieved to see second quarter growth numbers were in line with forecasts after disappointing recent manufacturing and trade figures. A miss on GDP would have spurred concern about a slowing global economy so it’s now up to the government to find a balance of policy tools to both maintain a steady growth level without allowing for too much liquidity.
Oil and gold also stole some of the spotlight this week with West Texas Intermediate crude hitting a 16-month high of a short-term supply drop due to a pipeline outage and concerns over upheaval in Egypt.
Oil slipped back from this high point on the longer term prospects on greater US domestic oil supply and the potential of a lower demand should China release lower than expected quarterly growth numbers. However, China numbers came in on target supporting current oil prices so at the moment, higher prices seem more driven by geopolitics in the short term.
For Austen Morris Associates’ investors – talk with your advisor about any repositioning to take advantage of markets at this time. For more information about Austen Morris Associates please visit our website.
Jordan Morley, Associate, Austen Morris Associates
Jordan provides his client with bespoke financial services and offers a diverse range of investment options ranging from education planning, growth of wealth savings, retirement plans as well as private equity. He also works with alternative investment options for high net worth clients. Connect with Jordan on LinkedIn.
Austen Morris Associates Wealth Management & Investment Team
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