Thursday Morning Cheat Sheet: 3 Stories Moving Markets

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Markets advanced around the world Thursday on news that the U.S. Federal Reserve would not yet taper asset purchases. In Japan, the Nikkei climbed 1.8 percent to 14,766.18, and the yen tumbled to 99.885 against the dollar. In Hong Kong, the Hang Seng climbed 1.67 percent to 23,502.51, and in Shanghai, the Composite climbed 0.29 percent to 2,191.85. In India, the Mumbai Sensex climbed 3.43 percent to 20,646.64. In Australia, the ASX All Ordinaries climbed 1.11 percent to 5,288.60.

European markets also advanced in midday trading. In London, the FTSE 100 was up 1.38 percent. In Germany, the Dax was up 1.02 percent, and in France the, CAC 40 was up 0.96 percent. The Euronext 100 index was up 0.91 percent, and the euro fell to $0.7383 against the dollar.

U.S. futures at 8:35 a.m.: DJIA: +0.17%, S&P 500: +0.29%, NASDAQ: +0.29%.

Here are three stories to keep an eye on.

1. Unemployment Insurance Claims

Weekly claims for unemployment insurance increased by 15,000 in the week ended September 15 to 309,000, according to the U.S. Bureau of Labor Statistics. The four-week moving average continued to decline, falling to 314,750, its lowest level since October 2007. California reported a significant reduction in claims of more than 25,000 due to “Labor Day holiday and computer system updates.” Issues with a software update initially fudged last week’s numbers, making them appear better than normal.

Unemployment Claims 9.19

Source: Data from the Bureau of Labor Statistics

2. FOMC: The Bond Taper Is Officially Not Here

After a lengthy amount of chatter and speculation, the long-awaited statement from the world’s most powerful central bank is here.

The Federal Open Market Committee, which is the arm of the U.S. Federal Reserve responsible for open market operations, concluded its two-day meeting Wednesday afternoon. Most people were expecting the Federal Reserve to dial down its bond-purchasing programs, but that’s not what the central bank delivered. Monthly bond purchases will continue as normal, with $40 billion in agency mortgage-backed securities and $45 billion in long-term Treasuries. Most economists and analysts expected a monthly bond taper of about $10 billion to $20 billion.

The FOMC statement says: “Taking into account the extent of federal fiscal retrenchment, the Committee sees the improvement in economic activity and labor market conditions since it began its asset purchase program a year ago as consistent with growing underlying strength in the broader economy. However, the Committee decided to await more evidence that progress will be sustained before adjusting the pace of its purchases.” (Read more.)

3. What Is Preventing Americans From Saving for Retirement?

There is no way to hide the fact that the financial collapse of the late 2000s was catastrophic for millions of Americans. The U.S. Treasury has estimated that 8.8 million jobs and $19.2 trillion in household wealth were lost. From the pre-recession peak to its trough, real gross domestic product contracted more than 5 percent, and many economists believe that the crisis has forever altered the growth potential of the U.S. economy.

Beyond broad strokes, the impact of the crisis on Main Street has been hard to quantify, but one area the crisis struck particularly hard was the capacity of Americans to prepare for retirement. Equities collapsed by as much as 40 percent just as the oldest baby boomers were gearing up to retire, obliterating the retirement savings of millions. Older workers are also often the first to go when layoffs begin, and layoffs were all the rage heading through the turn of the decade.

Without work, with stagnant wages, and having no trust in financial markets, millions of Americans are now facing what some have classified a crisis when it comes to preparing for retirement… (Read more.)

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