Bonds tumbled, while the dollar gained.
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Bond prices move inversely to their yields. France’s CAC 40 edged down 0.2 percent. “He mentioned he’s not concerned about the low growth we have had the first six months”. Productivity growth has weakened sharply in recent years and has been a major factor in holding the economy back. “There are light volumes, lightly staffed desks and these moves can easily happen”.
The S&P 500 rose as much as 0.7 percent in the wake of a speech by Yellen in Jackson Hole, Wyoming that said the case for increasing interest rates had strengthened, but did not indicate when the Fed would raise rates. “They will increase further if we are right in forecasting that non-farm payrolls increased by a solid 180,000 in August”. The U.S. Labor Department releases the next payroll report on September 2.
Phone companies led the list of declining stocks, while the health care and technology sectors rose.
In company news, Herbalife (HLF.N) lost 3.5 percent to $59.76 after a report said Carl Icahn, the nutritional supplement maker’s top shareholder, was looking to sell his stake.
“The overall takeaway, not just from Yellen but for the week, is that all the Fed officials – the voter and no-voter alike – have all taken a hawkish bent”. Indeed, Yellen limited the bottom of her fan chart to 12.5 basis points, or 0.125 percent.
The Commerce Department trimmed its estimate of second quarter GDP on Friday. But she stopped short of signaling when the next rate hike might be. “It was definitely supportive of a flattening yield curve”.
Five of the index’s 10 main groups ended higher.
Yellen was the lead-off speaker Friday for the annual conference sponsored by the Federal Reserve Bank of Kansas City.
“Fischer really maintained the focus on the near-term, whereas Yellen was a bit more comprehensive across the cycle”, said Eric Theoret, a foreign-exchange strategist at Bank of Nova Scotia in Toronto. “That’s where the distinction lies. Given the Fed’s history, it’s hard to see them hiking a few times this year”.
It included a 2.1 percent drop in the shares of Potash Corporation of Saskatchewan Inc to C$20.86, while Agrium Inc fell 1.75 percent to C$115.78.
MSCI’s broadest index of Asia Pacific shares outside Japan.MIAPJ0000PUS was little changed as investors awaited some direction from Yellen on whether the Fed might raise interest rates this year.
Futures climbed 0.7 percent Friday, trimming a weekly loss.
The dollar rose against the yen to a two-week high of 101.93 yen and was last up 1.3 percent at 101.88 yen. Saudi Arabian Energy Minister Khalid Al-Falih said an output freeze will signify that producers are content with the market situation.
Oil prices seemed to stabilize despite reports of Yemeni missiles hitting Saudi Arabia’s oil facilities. A projectile from Yemen caused a fire in a power relay facility, state-run Saudi Press Agency reported.
Yellen said that while the Fed’s support had been critical in supporting the economy, political leaders should considering using the government’s tax and spending powers as well. “The market is moving violently”.
USA crude oil futures settled 31 cents higher at $47.64 a barrel, while Suncor Energy Inc rose 0.6 percent to C$36.48. Brent crude, used to price oil internationally, fell 8 cents to $49.59 a barrel.
With assistance from Narayanan Somasundaram, Emma O’Brien, Nao Sano, David Goodman, Stephen Kirkland, Andrew Reierson, James Regan, Anooja Debnath, Kevin Buckland, Maciej Onoszko, Anchalee Worrachate, Alan Soughley, Brian Chappatta, Mark Shenk, Christopher Condon, Katherine Chiglinsky and Lananh Nguyen.
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Zinc rallied to a 15-month high in London on signs of an emerging shortage that’s made the metal the best-performing commodity this year.
