Dow Jones hits 12,000 after strong Home Sales data
City Index January 26, 2011 3:18 PM
<p>The FTSE 100 finished up 0.8 percent at the close, led higher by Aggreko after Goldman Sachs initiated coverage on the company with a buy […]</p>
The FTSE 100 finished up 0.8 percent at the close, led higher by Aggreko after Goldman Sachs initiated coverage on the company with a buy rating, the stock was up over 5 percent on the news. Randgold was amongst some of the biggest losers on the day, dropping 2 percent on weaker bullion prices.
Investors piled back into Sterling today after this morning’s release of Decembers Bank of England minutes. The report surprised markets after it showed that another member of the committee, Martin Weale, had joined Andrew Sentence, in voting for an interest rate hike at the January 13th meeting. The 6-2-1 vote helped the price of sterling recover some of yesterdays GDP led sell off, and stoked fears that the risk to the near term inflation outlook has increased. With the potential for further commodity price rises and the new higher rate of VAT still filtering through, inflation could be set to rise above Decembers 3.7 percent reading.
U.S. New Home Sales released at 15:00 London time showed a jump for December of last year to 300k, analysts had been expecting 280k new homes to have been sold. After initially selling off at the open the Dow Jones Industrial Average rallied on the news, hitting 12,000 for the first time since the summer of 2008.
After the London close investor attention will turn towards tonight’s FOMC meeting, where a vote of no change in rates is widely expected. Investors will also be eyeing the accompanying statement closely for clues on the economy and also any change to the bond buying programme.
StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.