U.S. stocks jumped ahead today after a government report revealed that Personal Consumption surged by the largest quarterly magnitude in two years. The street was partially stunned by the Fed’s decision not to increase its purchases of treasuries and asset-backed securities.
US Session Key Developments
- Personal Consumption Rises by Most in Two Years
- Bank of America, Morgan Stanley Directors Re-elected
- GDP Slumps More Than Anticipated
- Federal Reserve Leaves Level of Bond Buying Steady
Stocks Jump After Personal Consumption Jumps By Most in Two-Years
U.S. stocks jumped ahead today after a government report revealed that Personal Consumption surged by the largest quarterly magnitude in two years. The 2.2% leap in spending met investor sentiment as 9 out of the 10 sectors in the S&P 500 moved ahead. Financial led the pact, surging 4.77% and ultimately leading shares to extend its largest monthly gain in over 9 years, by 9.5% so far. Bank of America outperformed its industry after shareholders voted to allows the current board of directors to continue managing the Charlotte, North Carolina-based bank. Morgan Stanley shared similar news, leading the stock to rally 9.44%. News regarding the U.S. Gross Domestic Product did very little to quell the enthusiasm on the trading floor. Indeed, the annualized output for the U.S. dropped to -6.1% in spite of forecasts predicting the figure to only drop to a -4.7% annualized pace. Today’s Federal Reserve decision may have contributed heavily to the sustained rally seen in the late hours of trading. Central bank policy-makers left rates unchanged, but that was no surprise. The street was partially stunned by the Fed’s decision not to increase its purchases of treasuries and asset-backed securities. Bond traders reacted to the news by dumping their holdings as speculation that the board of governors would increase demand for such securities came to an end. Money raised from this selling may have then been used to purchase larger chunks of U.S. equities.
Dow 30 8185.73 +168.78 +2.11%
All but Telecommunications finished in positive territory with Verizon forced down after speculation that the company’s joint venture with Microsoft to build an iPhone competitor would disappoint investors.
SPX 500 873.64 +18.48 +2.16%
Implied volatility on the S&P 500 fell by a whopping 4.87% as equities had little trouble staying above water for most of the day. Only 73 of the 500 stocks in the index finished in the red.
NAS 100 1711.94 +38.13 +2.28%
Every sector in the tech-laden NASDAQ finished above par with many big players like cable-giant Comcast and Dell finishing ahead 8.5% and 3.4%, respectively.
Notable US Event Risk / Economic Releases
