U.S. Stocks Decline From 2016 Highs Before Central Bankers Meet

U.S. stocks slipped from their highest levels this year, led by commodity shares, as investors await further assurances that central banks will continue to support growth.

The Standard & Poor’s 500 Index declined 0.3 percent to 2,017.08 at 9:33 a.m. in New York, after capping its fourth straight week of gains on Friday, the most since November.

Equities on Friday joined a global rally as investors positively reassessed fresh European Central Bank stimulus measures. The Federal Reserve’s two-day meeting this week will be in focus for indications on the trajectory of interest rates. The Bank of Japan will conclude a policy review Tuesday, while the Bank of England has a rate decision Thursday. Central banks have indicated a willingness to continue measures to boost growth and stabilize markets, helping buttress a comeback for U.S. stocks in the past month.

The S&P 500 has rebounded more than 10 percent through Friday since a Feb. 11 low and trimmed its 2016 drop to less than 1.1 percent, after losses of as much as 11 percent amid concern over China’s economic slowdown and a deepening oil rout. It closed above its average price during the past 200 days for the first time this year, ending its longest streak below that threshold since 2011.

Fed officials have stressed that the pace of rate increases, following December’s first boost since 2006, will be gradual and data-dependent. Reports on retail sales, industrial production and housing starts will also be assessed this week for signs of strength in the world’s biggest economy.

Source: Bloomberg

MARKET

Yellen Supports Bond Purchases Before European Central Bankers

Federal Reserve Chair Janet Yellen said central banks must do whatever it takes if governments won’t use the public purse to invigorate economies struggling with low growth and below-target inflation.

“Central banks need to be prepared to employ all available tools, including unconventional policies, to support economic growth and reach their inflation targets,” Yellen said in the text to be delivered today at a Bank of France event in Paris.

Yellen spoke as European Central Bank policy makers appeared divided over how far they should go in pursuing bond purchases aimed at staving off deflation. ECB President Mario Draghi said he intends to boost the bank’s balance sheet back toward March 2012 levels, or about 1 trillion euros ($ 1.24 trillion) larger than today. Draghi has faced pushback from some ECB members over bond purchases.

“Given the slow and unsteady nature of the recovery, supportive policy remains necessary,” Yellen said in a reference to the aftermath of the global financial crisis.

Earlier today, Bank of France Governor Christian Noyer, a member of the ECB’s Governing Council, said policy makers have relied too heavily on central banks to boost economies struggling with low growth and low inflation.

“Central banks have been considered the only game in town,” he said. “We all know central bankers do not act in a vacuum.”

Yellen said bond purchases have been effective.

Source : Bloomberg


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Sumber : BPFNews.Com