Stocks Gain On Federal Reserve Update

The Federal Reserve Open Market Committee restated rates will remain low for a "considerable time," sending volatility into equity, debt and currency markets. Treasury buying was reduced by $5 billion per month, and the 2015 GDP estimate was cut to a range of 2.6 percent to 3 percent.

Major Averages

• The Dow Jones Industrial Average rose 24.9 points, or 0.15 percent, to 17, 157.
• The S&P 500 climbed 2.6 points, or 0.13 percent, to 2,002.
• The Nasdaq Composite gained 9.4 points, or 0.2 percent, to close at 4,562.

Top Stories

Homebuilder stocks gained Wednesday after the NAHB monthly survey showed homebuilders are more confident than they have been since 2005. The report stated that first time home buyers are still reluctant to enter the market.

The already strong steel sector continued to pick up ground after United States Steel (NYSE: X) and Nucor (NYSE: NUE) told Wall Street third quarter results will be better than initially expected. US Steel shares gained 10.1 percent while Nucor shares gained 3.9 percent.

To ease U.S. dependence on Russia, NASA granted Boeing (NYSE: BA) a $4.2 billion contract to transport astronauts to the International Space Station. Elon Musk’s SpaceEx has a similar $2.6 billion contract.

Stock Movers

Auxilium Pharmaceuticals (NASDAQ: AUXL) shares shot up 44.9 percent to $31.18 after the company received an unsolicited bid to be acquired for $28.10 per share from Endo International plc (NASDAQ: ENDP).

Lennar (NYSE: LEN) shares were also up, gaining 5.8 percent to $41.40 after the company reported better than expected fiscal third-quarter earnings.

Shares of Rackspace Hosting (NYSE: RAX) were down 17.7 percent to $32.39 after the company said it will remain independent despite "entertaining various proposals" from suitors.

General Mills (NYSE: GIS) shares tumbled 4.4 percent to $50.83 after the company reported weaker than expected fiscal first quarter results.

Adobe Systems (NASDAQ: ADBE) was down, falling 4.9 percent to $67.30 after the company issued a weak fiscal fourth quarter forecast. Adobe reported its third quarter earnings of $0.28 per share on revenue of $1.01 billion.

Commodities

Some profit taking kicked in Wednesday for crude oil futures. WTI was last down 0.77 percent to $94.15 after Tuesday’s 2 percent gain.

After a three day rally, gold fell below its previous low to $1,222.30 following the Federal Reserve’s interest rate decision. Gold contracts are now the cheapest they have been since January.

Currencies

The U.S. dollar shot to a new 52-week high on news that the Federal Reserve will reduce bond buying by $5 billion a month while keeping rates low. The PowerShares ETF (NYSE: UUP) that tracks the performance of the greenback versus a basket of foreign currencies gained 0.63 percent to 22.53.

Global Markets

Asian markets traded higher last night after Tuesday’s sell off. The Shanghai index gained 0.5 percent with Hong Kong's Hang Seng up 1 percent. Japanese markets gave up 0.1 percent.

European markets were mixed on the day. The Euro Stoxx index, which tracks 50 eurozone blue chips, gained 0.5 percent. London's FTSE gave up 0.2 percent, and France's CAC added 0.5 percent.

Source: benzinga.com

Binary Trading During the Holiday Season

During the holiday season, as a result of many people going on vacation, online stock trading on all financial markets is thinner with much lower trading volumes. This generally results in far smaller price fluctuations in stocks and commodities. Forex markets tend to behave differently with different influential countries celebrating some of the holidays at different times. Metals markets are closed on certain US holidays and it is advisable to check the days on which they con't operate if you are actively trading in that market.

There will be tighter limits in the markets. The results of thinner trade have historically been observed to have much tighter upper and lower limits in respect of equity and commodity markets. Adopting a limit bound strategy during holiday periods is recommended because with thinner trading, it is easier to pick up market trends. With a small upward trend, the way to go is to buy Call options with short to medium time lines while in a depressed market with resistance to higher prices, buying Put options would probably be more profitable.

Stock trends before holidays. Numerous studies by academic researchers have found that stock prices increase abnormally before holidays, such as the 4th of July, and return to previous levels when trade resumes after the holiday. This trend can be useful for binary options traders, trading both Call and Put trades in line with the historically observed trends. The identical trend has been found in the United Kingdom and Japanese equity markets despite their holidays being at different times to the US.

Forex markets and holidays. Forex markets are more easily affected by political events and economic indicators than equity or commodity markets. During holiday periods, most politicians enjoy vacations along with the rest of us, with very little political activity taking place while economic data reporting is also not done during holiday periods. With neither of these factors having to be taken into account, Forex markets generally are very flat during holiday periods and should be considered risky for binary options traders.

Caution needs to be exercised when trading before and during holiday seasons, but there is no doubt that a change in markets conditions will present opportunities for the binary options trader who has studies the markets and taken correct note of historical trends.

Source: invezz.com

Brent Prices Below $98 On Poor Economic

With all eyes on the Federal Reserve this week, oil prices remained soft on weaker global demand and rising supply.

Brent crude oil traded at $97.52 at 10:45 GMT after falling to a 26-month low on Monday. The commodity has been under pressure recently as troubling economic data coupled with increasing supplies have weighed on prices.

Libyan oil production has been on the rise as the country regains control of its oilfields and ramps up its output. The nation’s exports have risen to nearly one million barrels per day, still shy of Libya’s maximum capacity, but a huge jump from earlier in the year when production was suppressed to less than half of normal capacity.

Meanwhile, data from around the globe suggests that demand will not be able to compensate for the growing supply. Factory output in China, the world’s second-largest oil consumer, has fallen to a near six-year low, while worries about the conflict in Ukraine continue to plague Europe.

Reuters reported on Tuesday that Germany’s ZEW survey of investor sentiment posted its ninth straight month of decline with a 6.9 reading in September. The figure showed a sizable drop from August’s 8.6 reading but beat expectations of a 4.8 reading. The survey’s results largely reflect concerns about the growing tension between the West and Russia due to the conflict in Ukraine.

Moving forward, investors will be looking to the U.S. Federal Reserve as it meets for a two-day policy meeting beginning on Wednesday. The meeting will likely drive prices lower as most expect the bank to signal an earlier than expected rate cut, which would drive the dollar upward.

Source: benzinga.com

Pound Gains 2nd Day Versus Euro Before BOE Minutes

The pound strengthened for a second day versus the euro before the Bank of England release minutes of this month’s Monetary Policy Committee meeting.

Sterling was little changed against the dollar as Scotland prepares to vote tomorrow on whether to leave the U.K. Minutes from the August MPC meeting showed members Martin Weale and Ian McCafferty voted to increase borrowing costs, marking the first split on interest rates in more than three years and also the first under Governor Mark Carney. The BOE left its official Bank Rate (UKBRBASE) at a record-low 0.5 percent this month, a level unchanged since March 2009.

The pound gained 0.1 percent to 79.53 pence per euro as of 7:03 a.m. London time. It appreciated 0.1 percent against the common currency yesterday. Sterling was at $1.6278, after advancing 0.3 percent to $1.6277 yesterday.

The U.K. jobless rate, as measured by International Labour Organization methods, fell to 6.3 percent in the three months through July, according to the median estimate of economists in a Bloomberg News survey before the Office for National Statistics releases the data at 9:30 a.m. in London. That compares with a reading of 6.4 percent in the period ended June, which was the lowest since the fourth quarter of 2008.

Sterling strengthened 0.4 percent in the past month, according to Bloomberg Correlation-Weighted Indexes. The euro dropped 0.7 percent, while the dollar gained 3.2 percent.

U.K. government bonds returned 6.5 percent this year through yesterday, Bloomberg World Bond Indexes show. German securities also gained 6.5 percent and U.S. Treasuries earned 3.3 percent.

Source: bloomberg.com

Miners lift FTSE 100; eyes on Scotland, central banks

The U.K.’s FTSE 100 index moved slightly higher on Wednesday, supported by gains for mining companies, as investors focused on central banks and tried to stay calm ahead of a nearing referendum on Scottish independence.

London’s benchmark index UKX, +0.10%  rose 0.3% to 6,810.05, but still lagged gains for bourses across Europe. The index has been down for two straight sessions, amid investor caution over the potential for a “yes” outcome to the vote to leave the U.K. in Scotland, where polls open Thursday.

The pound GBPUSD, +0.32% which has been suffering from uncertainty surrounding the vote, showed some strength, trading at $1.6310 versus $1.6282 late Tuesday.

On the U.K. economic calendar, unemployment data and the minutes of the latest Bank of England Monetary Policy Committee meeting are due early. Investors will be looking to see if any more members voted to hike rates, as the August meeting showed the first dissent among members in several years. Both the joblessness data and BOE minutes are due at 9:30 a.m. London time.

The two-day Federal Open Market Committee meeting could keep investors at bay. The focus will fall on the Federal Reserve policy statement and any change in language that could hint of a sooner-than-expected hike in interest rates. Read: The only two words that will matter at the Fed

Stocks: Smiths Group PLC SMIN, -4.89%  topped the losers list with a nearly 5% drop after the medical-device and airport-scanner maker posted a fall in full-year revenue and profit, dragged by a weak performance at its detection business.

Miners were on the rise, with heavyweights such as Rio Tinto PLC RIO, +0.39% RIO, +2.05%  up 0.7% and BHP Billiton PLC BLT, +0.60% BHP, +1.33%   adding 0.6%. Anglo American PLC AAL, +0.63%  rose more than 1%.

Lloyds Banking Group PLC LLOY, +0.80% LYG, +0.21%  was a heavyweight gainer, up nearly 1%, and chip designer ARM Holdings PLC ARM, +1.85% ARMH, +0.11%  added 1.8%.

Source: marketwatch.com

Euro Steady as Tension in Ukraine Worsens

The euro remained below $1.30 on Tuesday despite encouraging trade data out on Monday. The common currency traded at $1.2961 at 10:00 GMT with the Fed’s upcoming meeting and the crisis in Ukraine continuing to weigh.

Reuters reported that the bloc’s trade surplus increased annually in July due to growing exports. The region’s trade surplus rose to 21.2 billion euros, with exports rising 3 percent and imports increasing by just 1 percent. The figure far surpassed last year’s July trade balance of just 18 billion euros, suggesting that the eurozone economy may have received a bit of a boost in the third quarter.

The surplus was largely attributed to an increase in exports to the Unites States, China and Britain, while the bloc’s deficit with Russia grew to 31.7 billion euros  from January to June. With sanctions limiting the European nations’ transactions with Russia, exports to the nation waned.

Hopes of ending the conflict in Ukraine and lifting sanctions against Russia were dashed on Monday after the ceasefire agreement in Ukraine was violated. The renewed fighting claimed six civilian lives and left a further 15 wounded, marking one of the largest losses of civilian lives since the conflict began.

German Chancellor Angela Merkel has been trying to persuade her Russian counterpart Vladimir Putin to withdraw his troops from Ukraine and continue working toward a peaceful political solution. However, Ukraine’s recent agreement to push through a trade agreement with the eurozone has heightened tension between the West and Russia, and prompted the Kremlin to threaten to restrict trade with Ukraine in retaliation.

Source: benzinga.com