Near term factors:
Rates hiked by .25%
Fed projections cut
Fears of economy slowing
Long term factors:
FED economic outlook
After a gut wrenching Fed announcement today, where we witnessed the Federal Reserve raise rates twenty five basis points, wild swings occurred across the board. Even though this may have been ‘priced in’ according to some, the market did not take it well and sold off. From high to low the S&P made a over 100 point swing which is astounding. Besides data, the overall focus from the fed was the economy. It’s showing signs of slowing which may have spooked everyone. Some of the shock came from the median projected federal funds rates getting slashed; which grabbed the attention of investors who thought inflation was taking over.
Recently, we have not seen any relief across the equity markets. Also, crude seems to be heading lower. It was off 6% yesterday and managed to stabilize today. This December is one for the record books as we are down roughly 11% MTD.
What’s next? How can we find some holiday cheer within the recent economic numbers? If we somehow manage to hear any good, tangible, news over the next few days leading into the holidays it will be crucial for the market to recognize it and recover. Until then, we may drift lower.
FOMC Minutes: https://www.federalreserve.gov/monetarypolicy/files/fomcprojtabl20181219.pdf
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