US markets came down from all-time highs in the final days of December in thin-volume holiday trading triggered by a drop in consumer confidence data and profit-taking after the Russell 2000 index made it into fresh territory for the first time since July.
The first working day of January saw the S&P 500 close down for the third session after manufacturing data missed expectations. US manufacturing is still well into expansion-mode so concerns over its strength should be short-lived.
With little economic data to work from and minimal corporate news at the start of the year, US markets are expected to follow oil prices lower on Monday’s open.
In 2014 the Federal Reserve ended quantitative easing in the US and 2015 is widely accepted as the year that interest rate rise. Zero-bound rates and QE have been rocket fuel to stock markets for going-on six years. Without the fuel at high altitudes, markets will decelerate and eventually fall to ground. The deceleration must come first so with rates expected to remain low into mid-year; that still leaves room for further equity gains in 2015.
Automakers General Motors Company (NYSE:GM) and Ford Motor Company (NYSE:F) are expected to be some of the biggest movers when they report December car sales on Monday. November saw of the highest car sales numbers in decades so December is expected to show a slight pullback. Nevertheless with low oil prices and low financing rates expected to continue and recalls hopefully in the rear-view mirror; 2015 is setting up for a good year for carmakers.
Futures suggest the:
S&P 500 will open 8 points lower at 2,050 with the
Dow expected to open 62 points lower at 17,770 and the
NASDAQ Composite18 points lower at 4,212.
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