US markets closed at fresh all-time highs

04 Jan 2018 Evaluate

The US markets closed higher on Wednesday, with the main benchmarks closing at fresh all-time highs. The positive trading mood from 2017 appeared to continue into 2018, with stocks in Asia and the US kicking off the New Year on a strong note. The main benchmarks held on to earlier gains after the minutes from the latest Federal Reserve meeting showed a distinct lack of unity over the central bank’s projection of three rate hikes in 2018.

The Federal Reserve in December forecast three rate hikes in 2018 but minutes of that central bank meeting show a distinct lack of unity with the projection. The minutes portray two camps, of roughly the same size, who are both uncomfortable with the forecast - and for completely different reasons. One camp of a few officials, on the dovish side, believe that three rate hikes this year might be too aggressive. These officials argued that three rate hikes might prevent a sustained return to the Fed’s 2% inflation target. They said they didn’t think interest rates had much further to rise before reaching the level of rates that would no longer be accommodative or boosting growth. The other, more hawkish, camp of a few officials thought the forecast of three rate hikes was too slow. These officials noted that financial conditions had not tightened since the Fed started raising rates at the end of 2015 and that continued low rates risked financial instability. Minutes from meeting also showed that Fed officials expect only a modest impact on the economy from the Republican tax plan. The Fed staff said it pushed up its forecast for GDP growth modestly because the final tax plan was larger than assumed. While a majority of officials believe inflation will gradually return to the Fed’s 2% target, several other officials think the pace of inflation may stay soft. The 12-month rate of inflation based on the Fed’s preferred core PCE index stands at 1.5%, below the bank’s 2% target.

On the economy front, the Institute for Supply Management said Wednesday its manufacturing index rose to 59.7%, the second-highest reading of the year, from 58.2% in November. Readings over 50% indicate more companies are expanding than shrinking. Sixteen of the 18 industries tracked by ISM reported growth. Across the subcomponents, production rose to 65.8 from 63.9 and new orders jumped to 69.4 from 64. That’s the fastest pace of new orders since January 2004.The employment index was one of the only weak spots, falling to 57 from 59.7.

Separately, construction spending rose 0.8% in November, to a seasonally adjusted annual rate of $1.26 trillion. The monthly gain was led by the private sector, where spending was up 1.0%. Construction outlays in the public sector were up only 0.2% for the month. Overall spending was 2.4% higher than in November 2016, and spending for the year to date was 4.2% higher than the same period a year earlier. September and October spending levels were revised up to a net 0.4% increase. In November, much of the gain was driven by residential building, which was 7.9% higher than a year ago. Construction of single-family homes was 8.9% higher. Outlays on transportation projects jumped 42% compared to a year ago, while spending on manufacturing was down more than 15% for the year.

The Dow Jones Industrial Average added 98.67 points or 0.40 percent to 24,922.68 and the Nasdaq gained 58.633 points or 0.84 percent to 7,065.53, and the S&P 500 edged higher by 17.25 points or 0.64 percent to 2,713.06.

US markets closed at fresh all-time highs

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.