US markets gain; Dow crosses fresh all-time highs

17 Jul 2014 Evaluate

The US markets closed higher on Wednesday, with the Dow Jones Industrial Average closing at a record level for the 15th time this year. The Federal Reserve’s Beige Book, which stated that economic conditions and labor markets showed improvement across the country into early July, gave stocks a late lift. The Beige Book, a collection of anecdotes about the economy, stated that only two districts, Boston and Richmond reported a slightly slower pace of growth since May. Aside from higher wages to attract skilled workers, wage pressures remained modest. Price pressures were generally contained with most of the 12 Fed districts reporting slight to modest price increases for both inputs and finished goods. Several districts reported higher prices for meat, dairy products, construction materials, and some metals. The Beige Book is based on information collected before July 7.

Separately, Dallas Fed President Richard Fisher stated that the Federal Reserve is likely to start raising interest rates gradually early next year and should begin shrinking its massive balance sheet in October to signal its confidence in the recovery. Fisher added that if the jobless rate continues to fall faster than expected and inflation to rise back to the Fed’s 2-percent target, the Fed could raise rates even sooner. The unemployment rate registered 6.1% in June, and many believe it has room to fall only to about 5.5% before unwanted inflationary pressures could begin to build. Fisher enlightened that he personally believes markets will adjust to the Fed’s signals gently, and if they don’t, the Fed can adjust its stance.

On the economy front, Industrial production rose a seasonally adjusted 0.2% in June to take the second-quarter rise to an annual rate of 5.5%. Manufacturing output rose 0.1%, mining output climbed 0.8% while utilities output dropped 0.3%. Capacity utilization stayed at 79.1%, a touch below the 79.2% consensus. The nation’s home builders are clearly feeling better about the housing recovery. A monthly sentiment index from the National Association of Home Builders jumped 4 points in July to 53, finally crossing into positive territory; 50 is the line between positive and negative sentiment. This is the first time that builder confidence has been above 50 since January and an important sign that it is strengthening as pent-up demand brings more buyers into the marketplace.

Meanwhile, the wholesale cost of US goods and services resumed an upward trend in June as the price of gasoline and pharmacy drugs moved sharply higher. The producer price index rose a seasonally adjusted 0.4% in June after a surprise 0.2% decline in May. Wholesale prices remain elevated compared to earlier in the year. The PPI has risen an unadjusted 1.9% in the past 12 months, compared to just 1.2% as recently as February. Still, that’s well within the range the Federal Reserve considers acceptable and inflationary pressure earlier in the production cycle appears to be tapering off.

The Dow Jones Industrial Average added 77.52 points or 0.45 percent to 17,138.20, Nasdaq was up 9.58 points or 0.22 percent to 4,425.97, while the S&P 500 gained 8.29 points or 0.42 percent at 1,981.57.

Indian ADRs closed in green on Wednesday; Infosys was up by 1.45%, ICICI Bank was up 1.45%, HDFC Bank was up 0.87%, Dr. Reddy’s Lab was up 0.41% and Tata Motors was up 0.11%.

US markets gain; Dow crosses fresh all-time highs

Create stable, long-term investment portfolio with strong, consistent stocks.

About MoneyWorks4Me

Our Vision

What Makes MoneyWorks4Me Different

Our Approach: Ensuring compounding work its magic on client portfolio.

Name of the IA registered with SEBI:	The Alchemists Ark Pvt. Ltd.
Logo:
Trade/Brand Name of IA:	MoneyWorks4Me Investment Advisers
Brand Logo:
SEBI Registration Number:	INA000013323 Validity – May 16, 2019 – Perpetual
Registration:	Non-Individual
BSE Enlistment No:	1187
Address:	B-101, Signet Corner Building, Balewadi Phata, Baner, Pune, Maharashtra 411045
Compliance officer Details:	Name: Shrikant Jagtap Email: shrikant.jagtap@moneyworks4me.com Telephone: +919860359463 Address: Same as IA
Grievance Officer Details:	Name: Mukta Vaze Email: mukta.vaze@moneyworks4me.com Telephone: +91 98609 19463 Address: Same as IA
Principal Officer Details:	Name: Atharva Bhide Email: atharva.bhide@moneyworks4me.com Telephone: +91 91758 99463 Address: Same as IA
Standard Warning:	Investment in securities market are subject to market risks. Read all the related documents carefully before investing.
Disclaimer:	Registration granted by SEBI, enlistment with exchange and certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors.