US market..Stock exchange indexes crushed down. 08/08/04 by OpenForex.com

US market..Stock exchange indexes crushed down. 08/08/04

09:24 08/09/2004

US market..Stock exchange indexes crushed down. 08/08/04 Friday trade session on American stock exchange market can easily be called “black Friday”. Let us remind that non-farm payrolls came out +32000 in the U.S. in July, whereas forecasted +220000. Previous value was revised from +112000 to +7800. The majority of market participants think the value is extremely low and June value was reduced by 61000. As a result, quotations fell on American stock exchange market. NASDAQ index fell 2,5% in the U.S. today. Dow Jones and S&P500 also crushed down. Prior to Friday release, it was forecasted that interest rates on the dollar would rise to 2% by the end of the year. Now, as Friday data were published, great number of economists say that rate target might be raised only by 0,50% to 1,5% (0,25% for two meetings). However, analysts assume that interest rate would be raised 0,25% at August 10 meeting and that would be the last interest rate hike this year. Base interest rate is on the level of 1,25 % now. It is natural that low rates are not at all attractive to those who want to invest money in dollars and that makes the dollar vulnerable. But at the same time, low rates support stock exchange indexes. We do not recommend making hasty conclusions. Note that unemployment made up 5.5% in the U.S. in July, whereas forecasted 5.6% and previous value also equaled 5.6%. unemployment rate reduction was mainly due to new jobs’ increase in agricultural sectors of production. Average hourly earnings in the U.S. in July made up +0.3%, forecasted +0.3%, previous value equaled +0.1%. Recommendations: 9600 might be the next target of decline for Dow Jones index. Wait for slight correction to, at least, 9915 prior to further decline of index rate. But in order to make trade decision, wait for safer signals. Standard&Poor’s500 index reached the lower bottom of the declining channel; in case it is broken out, the index rate might climb to 1010. However, index needs to get corrected to, at least, 1078-80 for further decline. That is exactly here that we expect regular intensive selling of index futures. Stay out of the market on Monday, so that to make more objective analysis of the situation. Recommendations: 9600 might be the next target of decline for Dow Jones index. Wait for slight correction to, at least, 9915 prior to further decline of index rate. But in order to make trade decision, wait for safer signals. Standard&Poor’s500 index reached the lower bottom of the declining channel; in case it is broken out, the index rate might climb to 1010. However, index needs to get corrected to, at least, 1078-80 for further decline. That is exactly here that we expect regular intensive selling of index futures. Stay out of the market on Monday, so that to make more objective analysis of the situation.

The forecast was created by trans1.