Stocks surge as plan for Syria is unveiled
US stocks were off to a positive start on Monday on the heels of better than expected trade data released in China. Japan reported a revision to GDP which boosted stocks and the Nikkei. Friday’s worse than expected non-farm payroll report, was likely strong enough to convince the Fed to taper its bond purchase program which continues to be the driving force behind capital markets flows. Technology stocks continue to be the best performing sector driven by Facebook (NASDAQ:FB) .
Japan reported an upward revision to second quarter gross domestic product were growth was revised from 0.6% to 0.9%. This further solidifies expectations that the government will go ahead with the retail sales tax hike in the second quarter of 2014 Japan’s July current account figures showed that headline increased from 336 to 577 yen. The increase in GDP boosted the Nikkei 2.4%, helping US stocks to gain traction at the open.
China reported a surge in its August trade surplus to $28.6 billion versus forecasts of 20 billion. Exports increased by slightly more than 7% while imports increased by 7%. The surge in exports went to Asian which while US exports climbed by 6%. The increase in demand spilled over into GDP forecasts for the coming month.
US stocks accelerated as the trading session moved on led by technology stocks such as Apple. Tomorrow Apple Inc. (NASDAQ:AAPL) , will unveil new products, which will likely generate volatility for the stock price.
News that the US has offered Syria a way out by having the country hand over all of its chemical weapons to a neutral party. Stocks accelerated into the close.
The S&P 500 index sliced through resistance near the 50-day moving average and is poised to test the August highs near 1,710. Momentum is increasing with the MACD (moving average convergence divergence) generating a buy signal as the spread (the 12-day moving average minus the 26-day moving average) crossed above the 9-day moving average of the spread.
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