The FED, USD, Global Stocks trending points
- While the stock prices had been continuing to drool all over the world, the Standard & Poor 500 closed Monday, the 17thof December, at its lowest level since October 2017.
- US Fed Monetary policy shift might cause a market flip-flop, as a dovish rate hike is likely
- Global scale stock sell-off might receive some relief, as US interest rates likely to be neutral, as US central bank’s inflation rate (2 percent) is closing in to the yearly target (1.9 percent at present).
Dovish FED likely to benefit global stocks
The much-anticipated year-ending FED monetary policy meeting is due on Wednesday, the 19thof December and FED might proffer a break to its hawkish monetary policy.
Global stock prices had been weakening on a continuous basis and the global scale sell-off has become pervasively widespread, as S&P 500 had been dragged down below October 2017 low. The Wall St. plunged 1 percent on Monday, December 17thand the Dow Jones Industrial had also confirmed a loss.
The Wednesday’s FED meeting would likely to provide a breathing space for the global stocks, despite threats of economic slowdown and a tightened economy, largely catalysed by the trade war impacts.
Standard and Poor 500 daily chart (September 11th, 2017 – December 18th, 2018)
US-China trade truce may help the upcoming upbeat momentum
Although, stocks had experienced a curious terrain, while a downwind breeze and souring market sentiment had been the determinants, an upwind jolt is expected followed by the Wednesday’s FED meeting. Additionally, the US-China trade truce and its recent improvements including deduction of US-auto tariffs on Chinese Soil and a “tremendous amount” of US Soybean import on Chinese course would definitively affect the market aversion and help to process a downside-up momentum.
Amid, pressures from US lawmakers including US president Donald Trump himself, the FED chair, Jerome Powel is more likely to give a break to his hawkish monetary policy and the forecasted 0.25% rate hike might not be on the cards, as the recent cascade of events suggest. A dovish FED seems to be able to provide sufficient extent of momentum to get the jailed stocks out of the dungeon.
While this report is being prepared (the 18thof December, GMT 14.00), the American dollar has already been facing obstacles, as it has been surfing at 96.45. However, Wall St., S&P 500 and US tech stocks have been languishing lavishly, residing respectively at $23810.4, $2562.10 & 6488.3, although the scenario is highly likely to change on tomorrow evening.
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[Disclaimer: The content of this article is personal opinion and should not be considered as investment advice or suggestion towards any trading activity.]