USA stocks offered little reaction to Speaker John Boehner’s resignation, effective at the end of next month, with the Ohio Republican saying a lot of work remains to be done before he relinquishes his House seat.
Even though a rate hike is viewed as a negative for the stock market, investors are cheering the added clarity from Yellen, Ron Insana, host of The Market Score Board Report, said on CNBC’s “Fast Money Halftime” show.
In a speech late Thursday, Fed Chair Janet Yellen, who spoke a week after the Fed delayed a long-anticipated rate hike, said she and other Fed policymakers do not expect recent global economic and financial market developments to significantly affect the central bank’s policy.
The TSX surged 107 points at midday as it recovers from a multi-day losing streak after comments from the U.S. Federal Reserve offered relief to investors and the latest reading on the U.S. GDP for Q2 helped alleviate concerns over the health of the global economy.
The Dow Jones Industrial Average rose 174.91 points, or 1.08 per cent, to 16,376.23. The Nasdaq composite climbed 20 points, or 0.4 percent, to 4,754.
SPORTSWEAR SPURT: Nike soared after the company’s earnings surpassed analysts’ expectations. The strength came from additional gains in consumer spending, business investment and residential construction. If the Fed continues to raise rates slowly over time, as Yellen indicated, borrowing money will eventually become more expensive for individuals and businesses, he said.
The U.S. Federal Reserve’s benchmark interest rate has remained at record low levels since the 2008 global financial crisis. However, third quarter growth is expected to be slower, somewhere near 2%. Yellen’s stance represents a stark contrast from her position last week when the Federal Open Market Committee only disclosed that 13 of 17 of its members were in favor of raising rates this year.
On Thursday, crude oil gained USD0.43 or 1.0%, to settle at USD44.91 a barrel, as the dollar weakened against a basket of some major currencies and with the market expecting a drop in USA production following the steep fall in crude prices.
US consumer sentiment fell in September compared to the previous month, according to a survey released Friday. They are pricing in about a 47 percent chance of a hike in December, and a roughly 56 percent probability of liftoff in January.