US stocks have weathered plenty of recent storms, including the threat of a US military strike on Syria, speculation about lower US Federal Reserve stimulus and weak jobs reports.
By week’s end, markets were eyeing the latest potential threat: a US political showdown that raised the prospect of a possible government shutdown.
Rising acrimony in Washington put a damper on a market that had cheered a surprise move by the Fed earlier in the week to keep alive maximum monetary support for at least a little longer.
The Fed decision immediately pumped up markets, sending the Dow and S&P 500 to all-time highs on Wednesday. The indices retreated somewhat in subsequent days, but still closed the week out with net gains. The Dow Jones Industrial Average tacked on 75.03 (0.49 percent) to 15,451.09. The broad-based S&P 500 rose 21.92 (1.3 percent) to 1,709.91, while the tech-rich NASDAQ Composite Index put on 52.55 (1.41 percent) to 3,774.73.
The week’s highlights in corporate news included banking giant JPMorgan Chase’s US$920 million settlement with several government agencies over last year’s London whale trading debacle. Shares of the bank, the nation’s largest in terms of assets, recovered somewhat on Friday after falling 1.2 percent on news of the fines.
Apple also won attention as the company’s latest generation of smartphones hit stores on Friday. Although reviews of the launch had been tepid, consumers worldwide flocked to Apple stores to purchase the gadgets. Shares ended higher on the week.
However, it was the Fed that dominated much of the week, not only because of the news on quantitative easing, but because of continued speculation on who would be picked as the next chairman.
Markets were lifted early in the week on the belief that the new front-runner for the job, Feb Vice Chairperson Janet Yellen, would be more dovish than former US Treasury secretary Larry Summers, who withdrew his candidacy on Sept. 15.
Heading into Wednesday’s finale of a two-day meeting of the Fed’s policymaking committee, market watchers had been girding for the Fed to trim back its US$85 billion per month bond-buying program by perhaps US$10 billion to US$15 billion per month in recognition of an improving economy.
Instead, the Fed kept the program at current levels, while cutting its economic growth forecast for this year and next, and expressing concern that the recent sharp rise in interest rates had already slowed the economy.
After the market’s applause died down, some market watchers expressed concern that the Fed had hindered its ability to guide markets. Analysts faulted poor Fed communication that they said harmed the institution’s credibility with investors.
Some market watchers also worried that the Fed’s move spelled bad news for the economy.
“Everyone’s just wondering: ‘Did they know something we don’t know,’” Kenjol Capital Management president Kenny Landgraf said, adding that the Fed’s move likely reflected reticence at the uncertain fiscal debate in Washington.
On Friday, House of Representatives Republicans passed a bill to fund the government, but attached a requirement to kill funding for the White House’s healthcare reforms. House Speaker John Boehner and other top Republicans harshly criticized “Obamacare” in championing the proposal, which stands little chance of becoming law.
US President Barack Obama meanwhile accused Republicans of risking a “tailspin” for the still recovering US economy by putting partisan zeal ahead of the good of the nation.
“If we don’t raise the debt ceiling — we are deadbeats,” Obama said in a fiery speech in Missouri.
Wall Street watched the proceedings with concern that could grow as the Oct. 1 budget deadline approaches.
“Watching Washington be dysfunctional is getting to be a regular pastime of Wall Street,” said Art Hogan, head of product strategy for equity research at Lazard Capital Markets. “We’ve seen in the past that it is not good for markets. The market does not like the unknown, and they certainly don’t like the government shutting down.”
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day
Thousands of parents in Singapore are furious after a Cordlife Group Ltd (康盛人生集團), a major operator of cord blood banks in Asia, irreparably damaged their children’s samples through improper handling, with some now pursuing legal action. The ongoing case, one of the worst to hit the largely untested industry, has renewed concerns over companies marketing themselves to anxious parents with mostly unproven assurances. This has implications across the region, given Cordlife’s operations in Hong Kong, Macau, Indonesia, the Philippines and India. The parents paid for years to have their infants’ cord blood stored, with the understanding that the stem cells they contained