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U.S Market Wrap 20 December 2018

Posted by James Nasioulas on 20-Dec-2018 16:43:38

It was a down day for markets as the Dow dove 350 points, making a new yearly low on Wednesday as the Federal Reserve raised interest rates a quarter of a point to a range of 2.25% to 2.50%. Overall the Dow fell -1.49%, the S&P 500 declined -1.54% and the Nasdaq saw the brunt of the selling down -2.17%.

After the Fed’s decision at 6:00am (AEDT) markets sold-off before a short lived rally turned around to crumble the markets. Investors were attentive to Fed Chairman Jerome Powell’s press conference which outlined the Fed had lowered its median forecast to two hikes next year from three along with the central bank continuing to shrink its balance sheet at the current pace.  

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We saw the U.S dollar index rise from 96.00 to close at 96.45 and a decline in treasury yields as investors fled into bonds – the yield on the U.S 10 year notes closed at 2.749%. In November the yield was at the highs at 3.250%. Oil seemed to buck the trend and rise 2% to $48.17.  

Leading the declines on the open and a possible bellwether for the world economy and economic growth, FedEx (FDX) shares were slammed 12% after weakening its earnings guidance for 2019 after the CEO cited “bad political choices” for the weakness in overseas business (see FDX weekly chart below).  Facebook (FB) shares also too the limelight, not for the right reasons as the social media giant fell more than 7% after admitting to giving companies access to users private data, including reading personal messages.

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In late afternoon trading we have seen a decline in global markets as investors are starting to think Jerome Powell poked the bear today sending stocks and indexes to new yearly lows. Going into the close of the local session the declines are highlighted below with the snapshot of the major CFD indices.  See Dow CFD index weekly chart below.

20.12.18 -1

weekly dow-1

 

Topics: +U.S. Market Wrap