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Forex · News · USMarket

NEWS / USMarket

USmarket Statements of FRS representatives about rates being near a target level inspire investors’ optimism

11:47 04/05/2006

On a background of positive expectations before the beginning of a season of the quarter report in the USA shares on Wall Street opened with a little growth yesterday.

 

Let's remind that according to experts’ forecasts companies’ profit, which shares are included into calculation of S&P 500 index, were up 11 % on results of the 1 quarter.

Besides yesterday's key stock indexes were supported by statements of FRS representatives. So, for example, Kansas FRB Head Thomas Heniga in yesterday's statement noted that FRS rate is already close to achievement of a neutral level.

It is obvious that similar statements give special optimism to investors, who in the majority expected that the rate would be raised at least twice.

 

It is remarkable that except for Thomas Heniga Richmond FRB Head Jeffry Laker also made the same comments. He also declared that Fed is close to achievement of a target level on rates.

So, Laker noticed that “FRS is determined for the balanced growth”, having added thus that "we are close to it". Richmond FRB Head also hinted that rates are already close to a neutral level, which neither stimulates, nor slows down economic growth.

 

Investors’ optimism found additional support in the message from undisclosed New York consulting firm that the US FRS could limit itself by increase of the refinancing rate only up to 5 %.

 

Indexes are also supported by the fact that rumors about fast replacement of US Minister of Finance John Snow also have not found the further confirmation.

Analysts specify that American president George Bush mentioned John Snow as in the present so in future time at the press conference.

 

It is necessary to notice that renewal of indexes rise is stemmed by disturbing events for investors. So, according to analysts’ forecasts in case of the negative script the Chinese People's Republic government can reduce not only volume of purchases of the American bonds, but also pull down considerably investments into the American assets.

 

However a primary factor of pressure upon the stock exchange is a situation in energy market. We shall remind that during two last weeks oil quotations grew smoothly, and only last two days oil prices continue smooth dip expecting weekly data on the US oil stocks.

Let's notice that data will be published today. According to the experts’ forecast oil stocks for a week grrew1.1 million barrels.

As a result cost of futures for oil WTI with delivery in May on NYMEX on April, 4th was down $0.51 - to $66.23 for barrel. And on today morning at the electronic tenders oil is in area of $66.00.

 

As a result Dow-Jones index of New York stock exchange was up 58.91 points and was closed at a level 11203.85. NASDAQ index was up 8.62 points and is at a level 2345.36. S&P 500 index was up 8.12 points and is at a level 1305.93.

And the US 30-years state bonds’ yield rose 0.010 in comparison with the previous closing and makes 4.913.

 

We still recommend waiting for the end of descending correction of key stock indexes. After its end there are possible new purchases of indexes futures.

While it is necessary to keep a waiting position.

 

 

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