Dow Jones Industrial Average will try to rally in order to avoid collapse

The level of support Dow Jones Industrial Average may fall

In brief: Dow Jones Industrial begin the day with the growth in trading the U.S. stock market today. Analysts and experts predict a drop in risk at the end of auction.

Dow Jones Industrial Average will start bidding with growth against a background of positive data from China. Rising Asian stock market may provide investors with new hope. At the same time, there remains the danger a collapse Dow Jones Industrial index. Meanwhile, demand for risky assets recovered due to improved economic expectations in the world, which greatly contributed to the recent macro statistics from Asia, as well as voiced by Ben Bernanke forecasts for economic growth the United States.

The continued strengthening of the euro-dollar pair, as well as growth in Asia, speaks in favor of technical recovery in assets related to raw materials. Rally in the stock market in the United States was interrupted by a very weak output data “Beige Book” Fed. The report showed that U.S. growth has been very moderate in April and May, which may be adjusted forecasts growth of U.S. GDP in the second quarter. Once again, the market reacted to the painful enough dramatic statement of Chancellor Angela Merkel’s support for a package of measures to reduce budget expenditures. As a result, investors are once again plunged into the problems of the Eurozone, doubting the effectiveness of European authorities, measures, and most importantly – in the prospects for eurozone economic growth, which could undermine the lack of incentives from the state. We can not ignore the rapid growth of risk of default BP, causing the decrease of energy indices. As a result, the index Dow, which earlier in the session held above 10000 on, dropped on the basis of trading on 0,41% to 9,899.25 on, and S & P – on 0,59% to 1,055.69 §. Despite the decline in the indices in the U.S. on the bidding results, the demand for risky assets grew significantly to this morning due to bad macro statistics, from Asia, as well as positive feedback from Ben Beranek on the prospects of the state’s economy. Yesterday it became known about 50% of China’s export growth, today – the growth of Japan’s GDP in the first quarter by 5%, as well as a marked improvement in the labor market in Australia. Ben Bernanke, speaking yesterday in Congress, assured the market to maintain the upward trend of the economy, despite the possible negative adjustments due to European issues. According to Beranek, economic recovery will not be strong enough to rectify the situation on the labor market and reduce the budget deficit, but he expects growth of 3-4% by the end of this year, against the background of a gradual replacement of state incentives for growth in consumer spending and investment.

Ukrainian Globalist
2010-06-10 13:21, Economics.

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