Having declined the first two days this week, US markets look to be stabilising with a mixed open today buoyed by a strong performance in Asian markets but tempered by the possibilities of further housing data weakness. Futures suggest the Dow Jones will open 11 points higher at 17,064 with the S&P500 expected to open 1 point higher at 1,983 and the Nasdaq 1 point lower at 4,050. Stocks have had a setback this week as sentiment soured over economic progress in Europe and China with monetary policy from the respective central banks deemed by many in the market to not be going far enough. Data from China has been weak this month prompting downgrades of economic growth for this year and next. Having recently engaged in sort of QE by adding 500bn in liquidity for its top banks, stock globally sold off this week, caught off guard by China’s finance minister dismissing the possibility of China shifting policy in favour of more stimulus. We may have seen an Alibaba top for stocks. The obvious excesses surrounding the largest IPO ever which traded 38% higher than its listing price on its opening day may prove to be symbolic of the last gasps of an overextended bull market. While still in an upwards trend, economic data has been more mixed from the US in the last month or so with a notable area of mixed results being the housing market. The recovery from negative home equity alongside low mortgage rates has spurred confidence in the American consumer, if the housing market starts to splutter that could act to derail the fragile economy. 3pm BST sees the release of Nee Home Sales, expected to have increased by 0.430M in August. CMC Markets is an execution only provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.
US stocks stabilise following strong Asian markets
20:00, 23 September 2014