Gold rose as much as 1.6 percent after Yellen said that while the case for a rate hike has strengthened recently, a gradual increase will be appropriate “over time”, initially easing concerns that the Fed would make a move next month.
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“Taken in balance the market has found a new direction today; it’s just with those comments coming so close together we got bounced around a little bit”.
Investors are parsing Yellen’s every word for clues on interest-rate policy at her speech at a conference in Jackson Hole, Wyo., where central bankers are gathered to discuss the economy.
Stocks ended mostly lower on Wall Street, giving up a modest gain from earlier in the day after Federal Reserve chairman Janet Yellen gave an upbeat assessment of the economy. The rally has sputtered in the second half as signs of an improving US economy rekindled rate concerns, prompting some investors to rein in bullish bets.
The S&P 500 was down 0.15%, the Dow Jones Industrial Average slid 0.28%, and the Nasdaq gained 0.13%.
Oil steadied in a volatile session and Treasury prices fell as investors across asset classes parsed the details of Yellen’s presentation, markets’ central focus of the week.
Demand in the industrialized world “will likely remain a drag on global oil consumption next year on weak economic growth, stagnating demographics, higher oil prices, and a reacceleration in fuel efficiencies”, the bank’s analysts said, contrasting that to emerging-market demand, which is likely to keep growing.
The S&P 500 is down 14.83 points, or 0.7 percent.
Business investment as a share of gross domestic product since 2008 has averaged almost a full percentage point below the previous decade’s average, according to government data.
The economy grew an annual pace of 1.1% in the quarter, slightly slower than the first estimate of 1.2%.
The Standard & Poor’s 500 index added 5 points, or 0.3 percent, to 2,178. “That is very anemic”.
“Most global currencies are down against the USA dollar”, he said. AT&T and Verizon each fell more than 1 percent.
Autodesk managed a small profit, beating expectations of a loss, and Pure Storage’s loss was far smaller than forecasts. That would be the fourth quarter in a row of drops. The dollar fell to 100.45 yen from 100.58 yen the previous day. The price of West Texas Intermediate oil, the USA benchmark, was up 20 cents to $47.53, while the price of Brent crude, the global benchmark, increased 5 cents to $49.72.
Given the forecasting errors of recent years, some economists were less than impressed, saying Yellen’s speech showed past policy errors were being repeated.
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A markedly stronger Euro in September, to the surprise of many forecasters, could mean another lurch lower in the GBP/EUR rate towards €1.15 which has been a major support zone over the past three years.
