Many experts believe the financial markets, after the FED will begin to curtail stimulus program, the U.S. stock market will decline. But there are reputable experts who predict an even greater increase of the market. Jim Paulsen, chief investment strategist of which Wells Capital Management, confident that in 2014 the U.S. stock market will be a new wave of growth.
The main argument in favor of this scenario appears that the role of loose monetary policy of the FED in the recovery of the U.S. economy is much less significant than the majority suggests. According to the strategist, the economy is not only able to get out of the stagnation phase, but also to begin to prosper and grow. Thus, the essence of the situation lies in the trust. If the markets get a hint of what the economy can fully function without feeding the FED, it will be a much more powerful stimulus than the actual program of quantitative easing.
The Company Bloomberg survey of economists conducted again in order to identify the expectations of the FED's September meeting. At the moment, 65 % of respondents believe that the monthly volume of redemption of bonds, which are currently at 85 billion dollars, will be cut at this meeting. The Federal Reserve is unlikely to make big moves. It's likely that the first cut will be worth about 10 billion dollars and this opinion is shared by the head of the Federal Reserve Bank of Atlanta Dennis Lockhart. He believes that the FED may start cutting QE in September, despite the fact that the target levels of inflation is still not achieved.
EUR/USD at trading yesterday launched an attempt to get back at the resistance line. The technical picture is that the return of a pair of quotes under this line cancels the bullish scenario, and may be a signal for the start of the game to drop the euro. The fundamental idea, which can serve as a driver of growth in the dollar until the September meeting of the FED may be disappointing economic data in the Eurozone. The pair is trading at 1.3260 and recently tested a past the resistance line at the bottom. In the case of the passage of a local minimum set yesterday, you can open the speculative short positions.
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