Bears retreated, Dow Jones Industrial Average went up

Dow Jones Industrial Average have reached 10,000 points mark.

In brief: Dow Jones Industrial turns into an open attack on the bears. The level of support for Dow Jones is growing.

Dow Jones is trading in a different manner. Bullish trend, which reigned in the market remains until the end of the trading day. Faith in the Dow Jones Industrial Average rising by the minute. Trading volumes increase. World stock indices took on a green pitch after the information appeared on the growth of exports from China in May, almost 50%. Immediately after the news index of Shanghai Stock Exchange soared to finish the trading session at 2.78%.

U.S. indexes yesterday, as if anticipating the surge of Asian optimism, finished the day in a rising zone, adding more than 1%. Picking up the baton, the European stock exchanges during the day tread its path in a northerly direction interrupting a four-lane surrender. Interestingly, the leaders of European growth was the Athens Exchange, whose index has appreciated by more than 3%. Investors once again appeared appetite for risk. In the New World stock trades today will be held to the accompaniment of speeches Benjamin Bernanke. At 10 am the head of the U.S. monetary authorities are expected on Capitol Hill, where he will speak at the hearing of the House of Representatives budget committee. As expected in a speech to legislators, chairman of the Fed to focus on the need for decisive measures to curb the budget deficit, which according to respected economists in the next five years will be comparable to GDP. If you do not begin to reduce government spending right now, then borrow money on the side to fill the budget holes United States will be increasingly difficult. This will significantly increase the discount rate, which in turn will lead to the stagnation of domestic consumption. To avoid this need in the foreseeable future, limit the budget deficit by 3% of GDP, or roughly the amount of $ 550 billion in comparison to the current fiscal year projected a record deficit of $ 1.4 trillion.

Of course, market participants are interested not only lookouts plans and macroeconomic challenges, but also the opinions of heads of Federal Reserve about the current situation in the economy and prospects for the timing of its recovery. Accurate diagnosis of the American economy in the early summer will provide published in the 2:00 pm “Beige Book”. It appears the Fed and contains data about the dynamics of productive resources, personal consumption and the labor market situation in all 12 regions of the United States, where there is a branch of the Federal Reserve. “Beige Book” is published regularly once a month and a half, two weeks before the next meeting of the Federal Open Market Committee (FOMC), the Federal Reserve authority sets the current level of the discount rate. In the published indicators of economic flywheel astute observers and market participants are trying to make a conclusion about the focus of monetary policy at the next meeting of the FOMC. Benefit of Bernanke does not end on it. After communicating with Congress, the pilot of the American financial system will move to the helicopter in the Richmond (Va.), where at 4 pm will speak at a conference on employment. Slowly recovering labor market is now causing the greatest concern to the American administration and restrains the initiative of the investors in the stock market. Look Bernanke to this problem may help them decide on further steps.

Igor Tringlers
2010-06-09 16:01, Economics.

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