BUSINESS NEWS FEBRUARY 12TH, 2016
ENERGY STOCKS MAKE A COMEBACK
After a week in stock hell, energy prices are finally seeing the light at the tunnel. A majority of the stocks in the S&P index showed a rise of 2.4%. Energy .SPNY and materials .SPLRCM have both been battered this year, but rose approximately 1.8% on Friday. However, one of the biggest gains manifested itself in crude oil, which rose nearly 11%. The stock market does appear to be bouncing back.
DUDLEY SAYS FED POLICY WORKS
President of the New York Federal Reserve Bank William Dudley says that, given the current level of inflation, the policy implemented by the Fed is “appropriately quite accommodative”. While there are fears that plunging energy stocks will lead to a slowdown of global economy, the Fed has maintained that it will continue to tighten interest rates as long as economic data shows stability in the United States
YELLEN HINTS AT NEGATIVE INTEREST RATES IN AMERICA
When asked of negative interest rates at a Congressional hearing, Federal Reserve Chair Janet Yellen said she “wouldn’t take them off the table”. Negative interest rates are being looked at in several countries right now, including Japan, Denmark, Sweden and Switzerland. The objective of this new idea is to stimulate growth in the United States economy. Negative interest rates are essentially a penalty fee for holding your money in banks. However, rather than the individual paying the fee, the bank would. According to Dan Sichel, economist at Wellesley College, the endeavor is feasible, but comes with an extremely high hurdle.
FORD RELEASES PLANS FOR NEW MODELS
The American automobile manufacturer plans to release four new models at the Chicago auto show. SUV sales are currently the fastest growing sector in the automobile industry, rising at a rate of 16% according to sales tracker Autodata. However, Ford has given no details about what kind of cars the models will be. Mark LaNeve, vice president of Marketing, Sales and Service for Ford, said that the price of an SUV is not dependant upon gas prices, although that has provided a boost to sales.