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US markets mixed, weighing on Fed rate rise
December 1, 2015, 3:01 pm

US markets are still waiting three economic reports this week, but there is growing confidence that the Fed will raise interest rates later this month [Xinhua]

US markets are still waiting three economic reports this week, but there is growing confidence that the Fed will raise interest rates later this month [Xinhua]


US markets were cautiously up Tuesday morning ahead of two Commerce Department reports on factory activity data and construction spending for November and October, respectively.

The Dow Jones Index opened up cautiously at 0.32 per cent on early Tuesday trading but then jumped up 0.92 per cent; the S&P 500 was down 0.49 per cent but later rallied to register 0.74 per cent gains by 10am EST.

The Nasdaq also opened down but reversed course and posted 0.62 per cent gains at 10am EST.

Investors will also be looking to an employment report from the Labor Department on Thursday, which is expected to show that the economy added at least 200,000 jobs in November.

There’s also positive sentiment in US markets about the health of the Chinese economy, which is believed to be stabilizing.

On Tuesday, the benchmark Shanghai Composite Index closed 0.32 per cent higher at 3456.31.

It has rebounded by at least 12 per cent since August following the sudden devaluation of the yuan currency.

In regards to the yuan, the IMF’s decision to add the Chinese currency to its Special Drawing Rights (SDR) basket may not have immediate impact but will likely boost Chinese exports in the long run.

In Hong Kong, long an export hub for Chinese products in the global commoditi

Earlier this week, China assumed the G20 presidency, at least a symbolic boost for the country’s economy.

Positive economic data in the US – on Tuesday, Fiat Chrysler reported 3 per cent rise in car sales in November – coupled with China’s return to a healthier status almost assure that the Federal Reserve will decide later this December to raise interest rates.

But Fed Chief Janet Yellen has warned markets that the increase will be very gradual and at snail’s pace.

The Fed wants to ensure that a rise in interest rates will have minimum negative impact on the economy and maximize consumer spending.

The BRICS Post with inputs from Agencies

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