U.S. Stocks Rise as Data Diminishes Fear; Dollar Hits Six-Week High; Manufacturing Sector Resurgent
U.S. Stocks Rise as Data Diminishes Fear (Bloomberg)
Reports from around the world looked good: Chinese, US, and European manufacturing are all on the upswing in August. The S&P 500 closed today on a gain of 0.4 percent. Investors closed their ears to the rising drumbeat of international intervention in Syria. “We know there are a lot tensions in the Middle East. If you wait for the dust to settle in order to get in the market, you’re going to be waiting forever. Look at the fundamentals and if the fundamentals are increasing, that’s your directional signal,” said Karyn Cavanaugh, a vice president and market strategist at ING U.S. Investment Management in New York.
Dollar Hits Six-Week High (Reuters)
Today, the dollar soared to a six-week high against major currencies after stronger-than-expected U.S. economic data strengthened expectations that the Federal Reserve will begin to taper its stimulus program this month. However, analysts are skeptical that the dollar will make further gains. “It is tempting to extrapolate U.S. dollar gains. But overall the data has been mixed in the U.S.,” said Jens Nordvig, global head of currency strategy at Nomura bank in New York.”The bean-count for U.S. third-quarter GDP so far is tracking below 2 percent. Hence, it is hard to make the bet on a data-driven U.S. dollar break-out.”
The U.S. manufacturing sector made significant gains last month, growing at its fastest pace in more than two years, even boosting expectations for faster U.S. economic growth in the second half of 2013. Moreover, The Institute for Supply Management (ISM) said its index of national factory activity rose to 55.7 in August from 55.4, the highest level since June 2011 (a score above 50 indicates expansion).