O.P. (BI) Global markets are plunging as the Fed’s ‘hawkish tone’ steals Christmas

O.P.

Conforme eu tinha previsto,
vem aí o maior bear market da história.
Que se segue ao maior e mais longo bull market de sempre.
Perfeitamente normal.
Não há practicamente nada que esteja bem no Mundo.
Era apenas uma questão de tempo.
Ainda por cima com os bancos centrais de todo o Mundo a inprimirem dinheiro desde 2007/2008…
E agora pelo menos a Federal Reserve já parou e está a retirar do mercado 50 biliões de dolares por mês.
Só não viu quem não quis.

FCMP



(BI)

Wall Street trader

Spencer Platt/Getty Images

  • Global stocks drop sharply after Fed raises rates and says monetary policy tightening will continue in 2019.
  • Investors had been hoping that the Fed and Chairman Jerome Powell would be explicitly dovish in his communications, but were left disappointed by the central bank’s tone.
  • It was a sea of red: US stocks dropped on Wednesday, with Asia and Europe following suit on Thursday.
  • All major European indexes are lower by around 1.5% in the first hour of the day. The Euro Stoxx 50 reached a 2016 low. 
  • You can follow the latest market moves at Markets Insider.

Stock markets around the world are tumbling Thursday after the US Federal Reserve dashed hopes that it would go into 2019 with a more dovish policy outlook.

The central bank’s Federal Open Market Committee unanimously voted to raise the fed funds rate by 25 basis points to a range of 2.25% to 2.5% on Wednesday, and said that it expects to continue raising rates in 2019, albeit at a slower pace than the four rate rises this year.

Investors had been hoping that the Fed and Chairman Jerome Powell would be explicitly dovish in his communications, but were left disappointed by the central bank’s tone.

“Investors were expecting a more dovish tone from Powell given the sharp fall in equity markets and challenging global macroeconomic conditions,” Hussein Sayed, Chief Market Strategist at FXTM said in an email Thursday morning. “All they got was a less hawkish tone.” 

“Despite many signs of global economic growth slowing, the Fed does not seem to be very concerned at this stage suggesting that monetary policy will continue to tighten albeit at a slower pace than previously projected,” he continued.

“What appeared to be even more concerning to equity investors is that Powell is not only ignoring Trump’s calls to pause the tightening cycle, but he is also not listening to them.”

Read more: Here’s how the Fed raises interest rates and why it matters

Powell’s comments and the Fed’s overall tone mean that markets are a sea of red Thursday morning, with both European and Asian stocks selling off sharply, and the major US indexes looking set to fall further when the open later in the day.

Here’s the scoreboard:

  • All major European indexes are lower by close to, or more than, 1.5%. Britain’s FTSE 100 has shed 1.3%, while Germany’s DAX is off 1.4%. The benchmark Euro Stoxx 50 reached a 2016 low. 
  • Asian equities were red across the board, with Japan’s Nikkei 225 the biggest casualty, losing 2.8% of its value on the day.
  • Chinese stocks were a little stronger, likely boosted by news that Beijing has resumed purchases of US soybeans. The Shanghai Composite, China’s benchmark index, was down 0.52% on the day.
  • US futures point to another bad day stateside. The S&P 500 dropped 1.5% on Wednesday, and is set to shed another 0.5% when the market opens. Both the Nasdaq and Dow Jones look likely to see similar losses.
  • Oil prices slumped on worries of slowing global growth. Brent crude tumbled 3.9%.