Stock markets were mostly down as U.S., European and Asian stocks tumbled or showed mixed results on Friday. The focus in the U.S. has moved towards the possibility of an interest rate hike at this week’s Federal Open Market Committee scheduled to end on Thursday. While comments from the Federal Reserve have been very clear about raising rates this year, the markets remain split on whether this will occur on September or December. Low interest rates have been very favorable with the stock market as it increases the amount of money available for investment. Low interest rates also lower the dollar's value, making it easier for large exporting companies to turn a profit. Therefore, it is expected that details about the upcoming interest rate hike would unsettle trading activity. On that note, U.S. stocks finished markedly lower on Friday. The Dow Jones industrial average fell 163.39 points, or 0.9%, to trade at 17568.53. The S&P 500 Index fell 22.5 points, or 1.1% to trade at 2079.65 and the Nasdaq composite declined 57.78 points, or 1.1%, to trade at 5088.63.
In Europe, stock markets were mixed on Friday as positive earnings reports were countered by concerns over weak Eurozone economic data and China’s growth. Greece and its creditors are scheduled to resume talks after the Greek parliament passed a set of reforms demanded by its creditors. However, news reports suggest that former members of Greece’s leftist government had plans to hack central computers in an effort to prepare for a return to Greece’s previous currency, the drachma. The plans were attributed to former members of the Syriza party, including former finance minister Yanis Varoufakis who was removed from his position earlier this month. The UK’s FTSE 100 gained 0.14% to close Friday’s trading session at 6664.37, the German DAX fell 0.1% to trade at 11500.97 and the French CAC 40 gained 0.32% to close the day at 5102.93.
Gold prices fell for the fifth consecutive week with a 4.3% decline on Friday. The upcoming U.S. interest rate hike has created even lower expectations from gold as the strengthening of the dollar lowers gold’s safe-haven appeal and makes it more expensive for purchase. Additionally, expectations for weak Chinese demand have also painted a bleak picture. Despite these factors, gold prices rebounded a bit since Friday and are currently near $1,100.
This week’s economic data releases include U.S. Core durable goods orders slated to release later today. UK GDP and U.S. consumer confidence reports will be released on tomorrow. However, the focus this week is the Federal Reserve’s FOMC meeting scheduled to end on Thursday.