USA stocks rise on Fed rate hike talk
- Author: Salvatore Jensen Sep 11, 2016,
Sep 11, 2016, 23:51
In the past few months, the Fed has been swaying back and forth on whether to raise rates this year, keeping the dollar in check.
She said as the economy and the labor market improved the case for an interest rate hike has strengthened in recent months.
"Even though it looks like the Fed may tighten in September and will probably tighten by December, people are still looking at Treasuries saying, 'I like those yields," said Evercore ISI strategist Stan Shipley.
The next key indicator is Friday's jobs report while Fischer, who said that the data could weigh on the decision over a hike, is due to speak again later on Tuesday in a television interview.
THE QUOTE: "The dollar jumped after Federal Reserve's chairperson, Janet Yellen, signaled impending rate hike in a speech at Jackson Hole last Friday", says Margaret Yang Yan, market analyst at CMC Markets Singapore.
Despite hawkish comments last week from both Fed Chair Janet Yellen and Vice Chair Stanley Fischer, markets still price in less than 50 percent chance of a rate rise in September.
US equity markets rose on Monday, buoyed by improving economic data, but capped by uncertainty regarding the timing of the next Fed rate hike.
"The Sensex returned strong earnings growth trends during past Fed hike cycles and market returns tended to track earnings growth closely".
Among gainers, Alstom rose 2.9 percent after the French transport group signed a 1.8 billion euro (S$2.74 billion) deal to design and build 28 new high-speed trains for United States rail operator Amtrak.
"After a week of guessing, Dr. Yellen left little to the imagination when she stated that the case for a Fed rate hike had strengthened, but remains very much data-dependent", Stephen Innes, senior trader at OANDA, said in a note.
The S&P 500 was up 10.4 points, or 0.48 percent, at 2,179.44.
Investors will turn their focus to a slew of USA data this week before the all-important jobs report on Friday. They moved initially in December, but their plans for subsequent rate increases have been derailed by global developments and a spattering of weak USA data points. The Nasdaq Composite Index was up 21.46 points, or 0.41 percent, to 5,240.37. USA gold futures for December delivery were down $4 an ounce at $1,321.90.
Gold futures slipped to a one-month low Monday morning in the U.S. amid pressure from a surging dollar, which was ignited by last week's Federal Reserve meeting in Wyoming.