Chaos in the stock markets caused the Federal reserve and the tramp
The increase in interest rates in the US in 2018 was responsible for a kaleidoscope of consequences, most of them can safely be called destructive.
The fed raised the rate 4 times, and although he promises in the next year, “behave well,” the market is not particularly enthusiastic about the promise of Powell and actively sold out of stock before Christmas, providing the worst drop in the S&P500 since 1929.
Because after the holidays good to wait, probably in the new year America’s stock market will continue to storm the lows, breaking all support levels, and target for the first quarter of 2019 I see the mark of 1800 on the S&P500, but only if price manage to break important support at around 2300. That is, have to wait and see how will behave the price, that is, both behave the investors.
The shutdown of the us government also brings a lot of uncertainty, and intentions trump to wait and require money to build the wall with Mexico to the last, not encouraging anyone, as such ultimatums to no good do not lead.
The market hates uncertainty, it’s the worst because it forces investors to wait, and therefore not to open new positions, only close the old, and here again we come to concerns about the fact that the us stock no one will be saved, while all were waiting, the only one that will work is the trading algorithms and robots, as well as triggered stop losses.
In the US, the shutdown not only spoil the celebration of Christmas to Donald Trump, but also a huge number of Americans. Now closed part of the national parks, some attractions, and employees of several government agencies are forced to spend the holidays in the office. Air traffic controllers, law enforcement officers, FBI, customs, and thousands of employees are forced to work for free.
Amid growing concern the dollar fell across the entire spectrum of the market(except Russian ruble), due to a drop in yields on 10-year US Treasury bonds by 25 basis points to a mark of 2.72.
The expected and announced in advance the inversion of the yield curve has not yet occurred, the yield of 2-year bonds are still below the 10-year-olds: against 2,57 2,72%, respectively, to talk about the signs of recession so far, but everything indicates that we will see very soon.
“International financial center”