The U.S. stock market has been gaining momentum, and we have seen some interesting things lately.
Investors have been talking about the Fed's decisions on interest rates these days, but they are not too worried about the future. They know that the Fed is most likely to increase American interest rates in December, although investors are closely watching what Janet Yellen will have to say in the Fed's statement.
Japan has been working hard to boost its economy by creating the right atmosphere for a positive inflation rate although they are not seeing any signs of success.
Awaiting the Fed
Investors are awaiting the Fed decision on interest rates, but stocks moved up slightly Tuesday. The Nasdaq rose 0.1% while the Dow and the Standard & Poor's rose by lesser amounts. In any case, the broad S&P ended just fractionally positive as well.
Wall Street is watching closely what Yellen has to say about interest rates in America. Low-interest rates boost economic growth, lift risk assets and bolster employment. Investors are expecting a rate hike this year anyway, but this increase is not expected soon by Wall Street experts.
Futures markets are expecting an increase in interest rates in December; they are not expecting a hike in the near future. The Bank of Japan is also gearing up to boost inflation and start growth in Japan. It was scheduled to meet Wednesday.
Investors also want to see if the Bank of Japan will cut Japan's short-term rates further into negative territory. The short-term interest rate in Japan is -0.1%. The market is focused on the things that central banks all over the world will be doing today, and this focus is important for them, too.
Wells Fargo in the spotlight
Wells Fargo's (WFC, Financial) CEO was to speak before the Senate Banking Committee in Washington Wednesday as the banking firm created fake credit card and deposit accounts just to meet the company's quota. The CEO said the firm is sorry it failed to meet the needs of its clients. As a result, Wells Fargo's shares rose 1.1% right away.
Wall Street was also checking the oil market where prices were under pressure again. America-produced crude dropped 1.6% to $42.61 per barrel. The Bank of Japan has also announced new measures for Japan's economy. The famous Dow futures of blue-chip firms rose 0.42%, and the Dow futures added nine points.
Furthermore, the Nasdaq 100 Futures index rose 0.53% Wednesday as well. The Bank of Japan kept Japan's interest rates at -0.1%, which caused an improvement in market sentiment. This was the bank's latest effort to increase inflation rates after modifying its own policy framework right away. The Bank of Japan will allow it to get rid of its important monetary base targets and its maturity range of bond purchases and use yield curve controls as well. The 10-year government bond rose into the useful positive result, and this happened for the first time in months.
Recovered yen
The yen recovered from some session lows Wednesday while the Nikkei closed 1.9% higher as well. Investors are not quite sure whether the Bank of Japan's measures will be able to bring about an increase in Japan's inflation rate. The dollar/yen rose above 1% after the Bank of Japan talked about the rate decision. The Fed was not expected to do anything about America's interest rates on Wednesday although attention has shifted to this institution. Investors will be watching closely what Yellen has to say about interest rates after the release of the Fed's statement.
The stock market in the U.S. gained some points Wednesday, and the Dow and Nasdaq indices are doing well, too. These indices increased their points although this happened at a lower level. Futures markets didn´t move that much, but investors might be expecting an increase in these markets in December. The Dow Futures and the Nasdaq 100 Futures indices increased today as well. Wells Fargo has been having some troubles related to its recent financial statement where the firm faked some figures. The company's CEO was to speak before the Senate in Washington so the company can clean its record once and for all. In any case, Wells Fargo's shares rose when the CEO said the firm was sorry for past mistakes.
Disclosure: I do not own any shares or any stocks mentioned in this article.
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