How is Political News Impacting Markets?
One of the factors investors and day traders monitor on a regular basis is political news that can have a direct or indirect impact on financial markets. There has been no shortage of political news in recent days that have such a potential to impact investors.
US Federal Reserve Chairwoman Janet Yellen appeared before a Congressional Financial Services Committee that she believes the economy to be “performing well” and as such it “could be appropriate” to raise interest rates at the fed’s mid-December meeting, although no decision has yet been made. Impact on the market was nearly immediate with the Dow Jones Industrials edging down 11 points and the S&P 500 remaining flat. 2-year treasury bonds rose to .84% reaching their highest value since 2011.
With expectations and anticipation of a Fed move to raise interest rates the US dollar rose against the euro and yen. Should the Fed decide the economy will support a rate increase the effect will be increased costs for borrowing but also a corresponding rise in interest paid to savings accounts.
What about International Political News?
Global market volatility has moderated somewhat in recent weeks lending a promising note for investors in some markets.
Japan has continued its recent course of quantitative easing (QE) to boost their economic conditions at the same rate. Inaction to increase the QE effort disenchanted some investors and market watchers. Further concerns in Japan are the impact of the still-faltering Chinese economy and low oil market prices. Bank of Japan policymakers remain cautious on the administration’s approach to escalation of QE and believe that weak growth expectations will bring about further increases in the near future.
China announced a policy to tie interest rates more in line with markets enabling the financial sector to work in harmony with their economy. China’s State Council stated that the improved formulation policy and continuing adjustment process will need to coincide with market demands. The announcement also said it’s important that China improve supervision of financial sectors to emphasize fairness and minimize risk.
South Korean business profits from leading industrial giants Samsung and Hyundai have declined for consecutive quarters losing market share to Chinese and Japanese firms. Finance minister Choi Kyung-hwan referred to pressures brought from China’s depreciation impact.
Impact for Traders from Political News
Global economies and corresponding political action can have a significant impact on your trade activity. By utilizing tools such as news feeds and alerts provided by online brokers day traders can take appropriate action to buy and sell based on current information.
SureTrader is a leading online broker that provides clients with real-time stock tickers to monitor stock activity. Tools are available for news feeds and analysis of stock activity and trends to provide the knowledge and insight that gives you an advantage over other online brokers. Our friendly and informed support staff furnishes reliable assistance to clients 24×7. SureTrader clients have access to information from exchanges that cross both national and global markets.
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Disclaimer: SureTrader Blog is not intended for U.S. persons. Stock information is not to be viewed as buy or sell recommendations.