U.S. stocks fell on Tuesday as the S&P 500 retreated from Friday's record close. There was fluctuation between gains and losses for much of the day on Tuesday as investors found promising U.S. economic reports upon returning from the U.S. Labor Day weekend.
The world market jumped on Wednesday amid an announcement from Ukraine's President Petro Poroshenko that confirmed a cease fire had been reached with Russia. This increased investors' hopes that the recently intensifying conflict could finally be resolved.
U.S. stock market
Tuesday's reading on U.S. manufacturing exceeded previous forecasts but wasn't enough for gains, as the stock market began September with losses.
The Dow Jones Industrial Average was down 30.89 points, or 0.2 percent, to 17,067.56, while the Nasdaq Composite rose 17.92 points, or 0.4 percent, to 4,598.19. The S&P 500 slid 1.09 points, less than 0.1 percent, to 2,002.28, continuing to hover above the milestone level of 2,000, according to Market Watch. After the opening bell, the benchmark hit an intraday record just over 2,006, but quickly fell.
Bruce Bittles, chief investment strategist at Robert W. Baird & Co. spoke about the encouraging manufacturing report. He noted that stocks achieved strong gains in August partly in anticipation of such upbeat economic data.
"A lot of that was probably already built into the market," Bittles added, according to Market Watch. He also said that the stock market is likely to keep "grinding higher," aided by foreign investors for whom it's "the only place to go," as quoted by the news source. However, investors should be cautious of risks in the market, such as the fact that zero interest-rate policies mean that outside shocks can no longer be countered by lower rates initiated by central bankers.
Investors treat the month of September with a degree of anxiety as it's the only month with negative average returns since 1980. The S&P has actually gained in eight of the last 10 Septembers and 63 percent of Septembers since 1995.
According to The Street, U.S. equities inched higher on Friday, closing on four consecutive weekly gains, their best August since 2000, even though concerns regarding overseas conflicts weighed heavy on the markets. Friday's close was also the largest monthly increase reached since February.
There has also been a steadily strengthening dollar in the U.S. Kathy Lien, managing director for BK Asset Management said that if this upcoming Friday's U.S. job report is good, the dollar could become even stronger than it is, reports CNN.
The news of a cease fire caused Russian shares to have an intraday increase of their most in four months, while the ruble rose 1.5 percent against the dollar, despite some contradictory reports of the extent of the truce talks from the Kremlin. The Kremlin reported that steps toward reaching a peaceful agreement had in fact been discussed. However, there was no formal cease fire because Russia is not a part of the conflict between Kiev and pro-Russian rebels in Ukraine's eastern Donbass region, reports Fox Business.
Dafydd Davies, partner at Charles Hanover Investments, said, "With Russia, things are never black and white. There are some questions in the background about how solid this cease fire actually is. But if this cease fire can hold and is confirmed, then we could see a nice move higher," according to the news source.
Wednesday' surveys showed the extent at which the European economies were being negatively impacted by these geopolitical tensions. Retail sales volumes were down for the first time so far this year and the rate at which the Euro zone business grew was also the slowest seen this year.
Meanwhile, Japan's Nikkei stock average climbed to near a seven-month high by 0.4 percent, boosted by hopes that the alteration of Prime Minister Shinzo Abe's cabinet will accelerate his growth-oriented policies.
This material is conveyed as a solicitation for entering into a derivatives transaction.
This material has been prepared by a Daniels Trading broker who provides research market commentary and trade recommendations as part of his or her solicitation for accounts and solicitation for trades; however, Daniels Trading does not maintain a research department as defined in CFTC Rule 1.71. Daniels Trading, its principals, brokers and employees may trade in derivatives for their own accounts or for the accounts of others. Due to various factors (such as risk tolerance, margin requirements, trading objectives, short term vs. long term strategies, technical vs. fundamental market analysis, and other factors) such trading may result in the initiation or liquidation of positions that are different from or contrary to the opinions and recommendations contained therein.
Past performance is not necessarily indicative of future performance. The risk of loss in trading futures contracts or commodity options can be substantial, and therefore investors should understand the risks involved in taking leveraged positions and must assume responsibility for the risks associated with such investments and for their results.
Trade recommendations and profit/loss calculations may not include commissions and fees. Please consult your broker for details based on your trading arrangement and commission setup.
You should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources. You should read the "risk disclosure" webpage accessed at www.DanielsTrading.com at the bottom of the homepage. Daniels Trading is not affiliated with nor does it endorse any third-party trading system, newsletter or other similar service. Daniels Trading does not guarantee or verify any performance claims made by such systems or service.