Stock exchange news. We are not likely to see strong motion and leaving the range $1120 this week. The reason for this is the end of current financial year in the USA on September 30.
On Wednesday trading finished with the drop of index by 2.07%. Quotations have reached the level of 1151.06 points. Attempts of growth are becoming shorter, which means that buyers are not confident and provide the basis to start new ascending wave only in order to leave current sideways motion.
When the mark of 1120 points is approached again, bullish trend will most likely be unable to resist and will move downwards. 1050 points is a mid-term target. Growth can only happen if the mark of 1120 points is covered, which is yet unlikely to happen. Today’s opening of trading can be influenced by the results of US GDP for 2 quarters.
During the morning session futures contract for SP500 index, which has gone up by 0.45%, is traded at about 1154 points.
Other news:
On Wednesday US FRS has introduced a new way to support economy, which is at the threat of recession. FRS is increasing the share of long-term treasury bonds by 400 bln. dollars till June 2012 in order to make credits cheaper. FRS management has claimed that “recent indicators show that general terms at labour market remain weak” and that unemployment rate is expected to decline gradually. No new jobs were created in August, but unemployment rate remained at the point of 9.1%. High unemployment rate, which has been kept in the USA for a long time, has become “the national crisis”. This is the opinion of the Head of Federal Reserve System Ben Bernanke.
EUROPE:
The situation with European debt remains uncertain. Investors felt uneasy because of no unanimous response from Europe. The countries, where Euro is used as currency, have been accused of taking no actions to resist crisis even when stock markets were in critical condition. However, “Europe, just like America, has several weak countries that have gone bankrupt. We have Illinois, which is bigger than Greece, we have California, we have New York. These big states have serious economic problems. Pension schemes in America are below waterline”, claimed a famous investor Jim Rogers in his interview at CNBC on Tuesday.
Euro exchange rate against dollar is rising on Thursday due to the expectation of positive results of German Parliament vote concerning amendments to the Law on European Financial Stability Facility (EFSF).
A decision to create EFSF was made in order to support financial stability in Europe by giving financial support to the countries of Euro zone when they encounter economic problems. In July 2011 the heads of 17 countries and regional governmental bodies made a decision to broaden the fund’s empowerments. The amendments to the law concern increasing the general volume of financial warranties for the countries of Euro zone from 440 bln. Euro to 780 bln. Euro.
