Another positive record finish for the S&P 500 yesterday was recorded on Wall Street, but despite this, the US markets closed lower mostly with some mild losses, as investors started to gauge in the results of the two days Fed meeting which will conclude tomorrow. It is a common methodology amid traders that they will not take excessive risk when a gun is pointed to their head- The Federal Reserve meeting. Similar set mind is echoed this morning by investors during the European market session, which is driving the equity market lower.
Despite the fact that the DAX index has logged all time high and is up nearly 4.43% so far this month, but the index has faced an increase in the selling pressure soon it goes to 9000 level, which is now acting as a psychological level. One would ask if there is any room for a further upward move, given that we have already seen a strong performance of the index during this year. However, the German economy did face the reality check last week when the IFO number fell below the expectation level, and this raised some eyebrows that the recovery around the euro-phoria is still too green.
A similar situation is perplexing any further upward move for the FTSE 100 index, as the recent gains in the housing market along with a stout recovery in the services sector, has already surpassed the heights of pre crisis, as shown in the GDP’s number which were released last week. Investors will be looking very closely towards the upcoming economic data which will further provide more information about the health of the economy.
Since March, the consumer credit number and mortgage approval data have climbed exceptionally abruptly and the expectation for the mortgage approval number which are due at 09:30 GMT is for 65K while the previous reading was 62K-once again an upward revision.
Back in the US, the economic docket is well lit today, ahead of Fed clinch their meeting tomorrow. The PPI, Core Retail Sale, Retail Sales and Core PPI are all due at 12:30 GMT time. The forecast for the retail numbers for September is expected to come somewhat flat, which will be a decrease, as compared to August reading. But, in the light of what took place in Washington, we do not expect this data will ignite any kind of firework and a possibility for a downward revision for the next week’s number also stays on the cards.
Furthermore, the sub-standard number for the housing data released yesterday which fell nearly by 5.6% would further suggest that the consumer confidence in the US could only be playing a catching up game.