Stock Prices Shoot Up Following Yellen’s Comments

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May 10, 2014 // By:admin // No Comment

The shares in Asia got a good push thanks to the comfort state that the dovish comments by the U.S. Federal Reserve chief had created. The easing tension between Ukraine soon after the President of Russia, Vladimir Putin requested the pro-Moscow separatists to put off the succession vote for a while.

The shares of Nikkei went up by 0.7% and out-of-Japan MSCI’s index of shares in the Asia Pacific region went up by 0.15% slowly moving away from the low that lasted for about 5 weeks on Wednesday. Within Asia, the markets will be looking at trade data of China soon after the exports unexpectedly went down again for the second time since last month in March and the growth in import went down quickly.

Yet another low outcome is most likely to bring down the risk appetite, while economists expect little fall in exports as well as imports during the month of April earlier this year. The concerns of weak manufacturing have weighed on them and the growth is slowly catching up in China, the second largest economy in the World that has buffeted markets globally in the last few months.

The European stocks are also expected to rise, with CAC of France going up by 0.3% and DAX of Germany also going up to 0.4%. Janet Yellen, the federal chief made a repeat of her dovish stance that the economy will still need plenty of support since there is still “considerable slack” seen in the labour market.

In some notes to his clients, analysts of Barclays stated – “Yellen … put her emphasis on the ways in which the economy and labour market were still falling short of the FOMC’s goals. She also emphasised risks to the economy from a potential continuation of the recent ‘flattening out’ of housing activity. The clear implication is that accommodative policy will be needed for a long time.”

S&P 500 shot up by 0.6% and the industrial average of Dow Jones went up by 0.7%. The remarks from Yellen managed to keep the U.S. Treasuries of 10 years at about 2.590%, close to 3 months low of 2.572% on Monday.

The imports and exports came back to a slight growth path during the month of April soon after a sudden fall the previous month, which supported the case of usage of targeted policy measures by Beijing in order to measure for underpinning the growth that may be key to getting the economy to a somewhat stabilized level.

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