Tuesday, December 14, 2010

Dow Jones Remains in Bullish Mode, 14/12/2010

US equities continue to be bullish with the S&P 500 index rising 0.6% to 1,240 points, a two-year high. The Dow Jones also rose 0.4% to close at 11,410 points, propelled by a 3.4% rise in General Electric.

The market is clearly counting on the economic recovery of the US, but economic data remains mixed for now. November Advance Retail Sales will be released tomorrow and is expected to weaken from 1.2% year-on- year to 0.6% year-on-year.

Crucially, the Fed Funds Rate will also be announced tomorrow; economists are expecting the Fed to continue holding the rate at an historic low of 25bps.

We continue to be positive on US equities, but keep a wary eye on the economic data this week as any major disappointments would trigger swift profit-taking and exert downward pressure on the Dow and the S&P 500.

US equities remain in bullish mode, S&P 500 hits new 2-year high

Source: Bloomberg

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