Stocks Called Lower on Reduced Demand for Higher Risk Assets
U.S. equity markets are called lower this morning due an overnight decline in demand for higher risk assets. Overbought conditions are also contributing to the weakness. The bulk of the selling pressure could be coming from commodity-linked stocks due to lower raw material prices.
Pressure could be on Higher Risk Assets as Greece Problems Resurface
Demand for Higher Risk; Bullish Outlook for Economy Boosts Stocks
Demand for higher risk assets and a bullish outlook for the economy helped drive U.S. equity prices higher on Monday. Stocks opened higher and held on to gains after getting a boost from better than expected ISM Non-Manufacturing data and an unexpected positive change in pending home sales.
Stocks are trading higher overnight on the prospects of a global economic recovery following the release of better than expected European and Chinese manufacturing reports. The rally started overnight in Japan when the Nikkei average rose fueled by the weaker Yen. Talk that Japanese investors will seek better returns in foreign markets helped support the U.S. equity markets.
U.S. equity markets closed higher after trading rangebound for most of the day session. Investors once again seemed to be shying away from buying strength. Despite the weaker Dollar, demand for higher yielding equities has been hampered by light volume and investor unwillingness to take on bigger risk ahead of this Friday’s U.S. employment report.
Firm Euro Helping to Boost Demand for Higher Risk Assets
The stronger Euro is helping to boost demand for higher risk assets, underpinning global equity markets overnight. U.S. equity indices finished last week higher, but the markets looked tired as the week-ended. The stronger Euro is encouraging investors to ignore last week’s action and instead turn their focus on the better returns being offered by equity markets.
Stocks Finish Higher boosted by Health Care Reform
U.S. equity markets turned around after a weaker opening buoyed by healthcare stocks. Stocks were under pressure overnight from concerns over Greece and an interest rate hike by India. Shortly after the opening, the markets stabilized as long-term investors saw a buying opportunity following a two day set-back.
FOMC Action Triggers Demand for Higher Risk Assets
On Tuesday, the Federal Reserve left its benchmark interest rate unchanged and reiterated that interest rates would remain low for “an extended period”. In its statement, it also mentioned that inflation remains subdued, and that the weak employment situation seems to have stabilized.
Earlier this afternoon, the Federal Reserve left its benchmark interest rate unchanged and reiterated that interest rates would remain low for “an extended period”. In its statement, it also mentioned that inflation remains subdued, and that the weak employment situation seems to have stabilized.