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July 30th Midweek Silver Market Update

Precious metals are not faring very well today after some better than expected earnings reports and US economic data was made public. In addition to investors mulling over the United States’ second-quarter GDP data, they are also gearing up for the conclusion of the most recent FOMC policy meeting and post-meeting statement made by Janet Yellen. In addition to the flurry of economic data being released today and this week, investors also have plenty of ongoing geopolitical developments to talk about. When it comes down to it, the next few days and weeks are shaping up to be uncharacteristically busy for the middle of summer.

Earnings, GDP Reports Boost Dollar and Equities

The last two weeks have played host to a number of earnings reports, but few have been more upbeat than what we saw from Twitter today. After its second-quarter performance beat forecasts and representatives from Twitter boosted their sales forecast for this year, Twitter’s shares were seen soaring, up by more than 20% as of the writing of this post. Generally speaking, US equities are seen benefiting from the economic data made public thus far today.

Adding to upbeat earnings from Twitter was a US second-quarter GDP report which showed the US economy growing by more than was forecast. With annualized growth of more than 4%, the US economy is clearly showing signs of improvement. This data helped keep the Dollar trending higher as it continues to make gains against the euro currency. Now, the eyes of the investing world turn to today’s FOMC meeting, which is expected to wrap up sometime this afternoon. Perhaps more important than the meeting itself will be the post-meeting statement made by the chairperson of the Federal Reserve. While it is the hope of many that Ms. Yellen will shed some light on when and by how much interest rates will be raised, it is my opinion that investors will be given little to no info regarding interest rates. Instead, I expect Ms. Yellen to talk about the Fed’s continued tapering of the Quantitative Easing monetary policy. After all, QE is expected to be completely eliminated by sometime this upcoming Fall.

As we head into the latter half of the week, all this economic data in conjunction with the large number of ongoing geopolitical happenings will be catching the attention of investors. With the death toll on the Gaza Strip rising daily, and fighting between pro-Russian rebels and Ukrainian forces near Donetsk intensifying, the duration of this week is shaping up to be fairly exciting.

 

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