Saturday, May 11, 2013

Third positive week in a row on Wall Street

U.S. stocks ended once again in positive territory, hereby setting new records.

Despite the frequent warnings about an upcoming correction in U.S. stock markets prices increased once again on the stock exchanges Friday.

Dow Jones rose 0.2 percent, the S & P 500 went up by 0.4 percent, while the Nasdaq Composite rose by 0.8 percent. Thus, investors could note that the benchmark U.S. stock indices for the third consecutive week closed in a positive territory, and the Dow and S & P once again reaching record levels.

There was not much news to move prices Friday, but still they went up. This is according to analyst David Madden of IG Markets in London is probably due to investors will not take the gains home just yet - and this is partly due to central banks' aggressive policy to lend money to something that resembles zero interest rates.

Nobody wants to buy at the top, but because the nervous central banks pushes it all, no one at the same time wants to take money off the table.

In addition, there was friday focus on currency exchanges. The U.S. dollar strengthened still relative to the Japanese yen, and it is a result of the Japanese government very accommodative policy. In other words, the Japanese attempt to deliberately weaken their currency to increase inflation and stimulate exports.

The Japanese policy in this area has in recent months been heavily criticized by the nation's trading partners, but it has not changed that much - despite the fact that it will cost jobs in countries like the United States.

The weakening of the yen caused no nervousness in the United States Friday, and the movements in relation between the yen and the dollar, undoubtedly is due to the fact that the dollar has strengthened as a result of the recovery in the U.S. economy - rather than even a conscious effort by the Japanese government to get the yen down.

No comments:

Post a Comment