Thursday, January 11, 2018

The Dow Jones rose above 30 for the first time 22,000

The Dow Jones rose above 30 for the first time 22,000

Since the Dow Jones US presidential election 30 index gained nearly 23% and rose above 22,000 points. And in many ways it really merit Donald Trump. Despite some confusion in his actions, the lack of unity in the Republican Party, and a small percentage of the implementation of election promises, the reaction of investors is clearly positive. Meanwhile, the foundation upward momentum is still something more substantial than a policy: since November last year, US companies are constantly improving their profits. Each next season report is a little better than the last, and as long as this trend continues, the market will continue to grow.

I come August and the second half of it - is traditionally one of the most peaceful periods in the market. The largest companies have already reported, the politicians are about to begin a vacation in a vacation leave and many financiers. Until September will happen almost nothing of importance, except the bankers meeting in Jackson Hole 24-26 August. This year, in addition to Janet Yellen and other heads of federal banks, there will come the chairman of the ECB, Mario Draghi.

The world's largest meeting of economists to discuss the future of monetary policy may set the tone for the second half of the year. Investors will be interested in how quickly will raise rates world's central banks and how it will affect national economies. Usually in Jackson Hole is revealed not so many plans, as expected before the meeting. However, even a confirmation of intentions, voiced earlier, it will be perceived positively, as it will indicate a preservation of confidence in economic growth.

Near the key US market event occurs only on 20 September. This day will be announced the results of the Fed meeting, and most of all, that it is at this meeting will inform the regulator about the terms and rates of reduction of the balance. The same day, the Fed will release the economic outlook, and Janet Yellen at a press conference to explain in detail how the regulator intends to continue to operate.

These events cause a surge in volatility in the market, despite the fact that the Fed systematically preparing investors for this step. And bet the central bank will not change, leaving this decision up to the December meeting.

Autumn will be exciting and not without corrections, as planned at least Posts by the ECB and Bank of England on the timing of a rate hike. If this macro backdrop in the region will not show recovery, it will lead to a decline in European indices. America compared to Europe will remain more stable, as its economy is growing more confident and more stable companies increasing their profits.

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