Market Update & Important Indicators
U.S. stocks extended their selloff into a third straight session, dragged down by declines among big industrial firms and auto makers. During a speech on Thursday in Amherst, Massachusetts, US FED Chairman Janet Yellen’s stated, “most FOMC participants, including myself, currently anticipate that achieving these conditions will likely entail an initial increase in the federal funds rate later this year, followed by a gradual pace of tightening thereafter. But if the economy surprises us, our judgments about appropriate monetary policy will change”. Shares of Caterpillar Inc. posted the biggest decline in the Dow after the maker of heavy equipment cut its revenue outlook and announced up to 10,000 job cuts as part of a cost-cutting plan. The Dow fell 0.5% to 16,201 and the S&P 500 dropped 0.3% to 1,932.
Australian shares bounced back Thursday as recently hard-hit banking and energy counters helped drive a broad recovery from a two-year closing low the day before. The S&P/ASX 200 climbed 73.6 points, or 1.5%, to finish at 5071.7. The index fell 2.1% on Wednesday, ending below the 5000 level for the first time since July 2013.
Shares in Japan fell, tracking regional losses earlier this week, as the fallout from Volkswagen AG's diesel-emissions scandal hit Japan's auto-related sectors. Shares of Mazda Motor Corp. were down 6.8% and Mitsubishi Motors Corp. lost 2.8%. The Shanghai Composite Index gained 0.9% and South Korea's Kospi was up 0.1%. Hong Kong's Hang Seng Index fell 1%.
Shares in Europe fell with the Stoxx Europe 600 shedding 2.1%, Germany's DAX declining 1.9% and France's CAC 40 felling 1.9%.
Metals on the LME were mixed with copper flat at US$2.30/lb and zinc rising strongly for a second day, up 1.6% to US$0.75/lb. Ahead of the Roy Hill first shipment next month, iron ore fell 1.6% to US$55.30/dmt. Gold was strong ahead of Janet Yellen’s interest rate speech, jumping US$20/oz to US$1154/oz, The AUD gold price at A$1651/oz is up A$50/oz in two days. The HUI index rose 6%.
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