Stocks Rise; Dollar Trumps Yen; Home Builder Confidence Hits 7-Year High
Stocks trimmed their gains today as investors expressed concern on whether the Federal Reserve may signal that it will scale back its stimulus at the conclusion of its next policy meeting. “We continue to have these momentary scares around what the next step for the Fed might be, which seems to send some chills up the spine of the market, but that’s a little overdone,” James Dunigan, chief investment officer in Philadelphia for PNC Wealth Management, said.
The dollar trumped the yen today — its first time in five trading sessions — as stock markets rallied on the Federal Reserve’s upcoming announcement about whether it will maintain its monetary stimulus policy. “The dollar has been selling off over the last week or so, so I think it probably has more room to gain than to lose,” said John Doyle, currency strategist at Tempus Inc. “That said, if (Bernanke) comes out and basically shoots down any idea of tapering back QE this year, then obviously the dollar is going to weaken on that news.”
Americans are feeling confident about their housing prospects, so much so that it’s been seven years since they have last felt this way. Specifically, the monthly sentiment index from the National Association of Home Builders hit eight points in June to 52, and any score above 50 indicates that builders view sales conditions as good. “With the low inventory of existing homes, an increasing number of buyers are gravitating toward new homes,” said NAHB chairman Rick Judson.