Positive Economic Data Sends US Stocks Up – Have We Seen The Bottom?

The US market, along with the global market has been struggling throughout the beginning of the year, and for good reason. Global economic conditions and the massive decline in the value of oil have put quite a bit of pressure on the global market as a whole. However, on Friday, we saw big gains in the United States after positive news was released with regard to the US manufacturing sector. Today, we’ll talk about the news that was released, how the market reacted to the news, what we can expect to see moving forward, and how binary options traders can profit from the trends.

US Durable Goods Orders Climb In January

Durable goods orders are one of the larger pieces of the equation when gauging US economic conditions. That’s because manufacturing plays a big role in the overall GDP in the United States, and durable goods orders tell us whether or not the manufacturing sector is growing. With that said, on Thursday of last week, we received the report for US durable goods orders in the United States. The report showed that orders climbed by 3.9% in the month of January, the biggest single month increase that we’ve seen in this data since the middle of the year 2014. For many, this is incredibly positive news with regard to the manufacturing sector as it shows that the sector is no longer spiraling downward. However, this data can also be incredibly deceiving. The truth is that macroeconomic data like this has a strong history of volatility. Therefore, a single month of increasing data doesn’t always suggest a long term turnaround in the sector. Nonetheless, it is positive news and has led to incredibly positive movement in the market.

How The Market Reacted To The News

As binary options traders, we know that any time we see positive news with regard to economic conditions, we can expect to see gains in the stocks associated with that economy. So naturally, we saw strong gains from US stocks on Thursday. In fact, during the trading session, the Dow Jones Industrial Average (DIA), Nasdaq (QQQ), and S&P 500 (SPY) all posted incredible gains. However, on Friday, we saw slight declines as the market corrected.