The Business Times

Early Aug's downward trend could resume

This week may be stormy as odds are reset on likely date of Fed rate increase

Published Sun, Aug 17, 2014 · 10:00 PM
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LAST week, shares rebounded somewhat from the August doldrums as a lull on several fronts allowed investors to focus on US growth prospects.

This week promises to be a stormy one, however, as traders reset odds on the anticipated date of the Federal Reserve's interest-rate increase.

The ceasefire in Israel and an agreement to allow a Russian humanitarian convoy into Ukrainian separatist areas represented tentative diplomatic progress in the eyes of traders last week. Stocks dipped and oil prices spiked on Friday when Ukraine said it destroyed some Russian military vehicles in a contretemps with the aid convoy. The US, meanwhile, was flirting with another ground force landing in Iraq.

From a cold economic perspective, such conflicts touch American lives mostly in the form of higher petrol prices. Last week, prices of energy commodities were flat to down as traders focused on the glut in supplies produced by extensive "fracking" …

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