Despite this week’s reddish end for Wall Street, Dow Jones books the best monthly gain in 4 years. Analysts deemed October the best month for the index since 2011. On Friday, U.S. stock markets U.S. stock markets posted slightly weaker results, but Wall Street still had the monthly best gains.
At the end of the day, Dow Jones slipped 92 points to 17663, S&P 500 index tumbled 10 points to 2079, and NASDAQ fell 20 points to 5053.
Analysts explained that this month Dow harvested more points than in any other month on record. But by percentage, this month was the best month for the index in four years.
The best performing stocks were those in tech, energy and material sectors, despite posting heavy losses in the previous quarter. Utilities, however, were expected to lag behind but they were Q3’s only winner.
Markets became restless Wednesday after an official announcement from the Fed about the benchmark rate hike. Although the feds did not announce a rise, their wording suggested that an interest rate hike could happen in December. Traders have been keeping an eye on other countries’ central banks for months now in an attempt to predict the Fed’s decision.
In the meantime, the Japanese central bank decided to take no more measures. Regulators announced that they would not pump another stimulus into the economy, and that they decided to lower annual economic growth expectations from 1.7 percent to 1.2 percent.
Moreover, The Bank of Japan delayed the deadline for an inflation goal of 2 percent. The target is expected to be met in early 2017 now rather than in the summer of 2016. Retail prices in the country rose 0.9 percent in September from 0.8 percent in August.
Larry Shover of the Solutions Funds Group explained that the European Central Bank seems to plan to expand ‘expansionary measure’ by this year’s end. If that happens, Japan’s central bank would certainly change its stance on the volume and pace of its stimulus, Shover noted.
The news pushed up Nikkei index 0.78 percent, despite weak readings on other Asian markets. China’s benchmark index fell 0.14 percent, while Hong Kong’s Hang Seng tumbled 0.79 percent. The U.S. currency was 0.52 percent down against Japan’s currency.
Shover explained that the US dollar-yen dynamic is stretched to the maximum. He also said that Japan’s central bank might try to lower the yen even more, and keep Nikkei high. But the analyst doesn’t think that weakening the currency further is healthy for the economy. Its current level is enough to help the country engage in a structural reform.
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