U.S. stocks on track for worst December

10 December, 2018

December has so far been one of the worst year-ends for global investors in recent history. The S&P 500 has fallen 4.6% from the beginning of the month, and if it remains at current levels until year’s end it will mark the worst performing December since 2003. Neither the dovish statements we heard from the Federal Reserve’s policymakers nor the trade truce between U.S. President Donald Trump and his Chinese counterpart Xi Jinping provided signs of relief to the financial markets.

October’s selloff was mainly attributed to fears of the Fed’s tightening policy. However, after Fed Chair Jerome Powell said rates are “just below” neutral, anxiety over higher interest rates is no longer justified.

The arrest of Huawei Chief Financial Officer Meng Wanzhou in Canada, following a U.S. extradition request, have created serious concerns that the truce between the two Presidents may end before the 90 days agreed upon. This is occurring at a time when the global economy is experiencing a slowdown - and here comes the big threat. Bond markets have been more accurate than stock markets in predicting economic slowdowns.  The short end of the U.S. Treasury yield curve already inverted last week and it looks like just a matter of time before the long end of the curve inverts too. While this doesn’t necessarily indicate a recession is imminent, it’s a bold warning signal.

When looking at latest U.S. economic data, it doesn’t look bad. Despite the U.S. NFP missing markets expectations coming in at 155,000, the unemployment remains at nearly a 50-year low. U.S. factory activity remains healthy according to the latest ISM figures, and similarly the service sector has reflected strong growth in November. However, the U.S. economy won’t be able to sustain its growth levels when everywhere else is experiencing a slowdown, and the real test will be next year when Trump’s fiscal policy goes into reverse.

Equities in Asia resumed their selloff from last week, while Europe along with U.S. markets are also set to open in the red according to futures.

This week is a big one for the UK with the European Court of Justice expected to rule on whether the UK can cancel Brexit unilaterally. UK Prime Minister Theresa May is expected to face defeat in a House of Commons vote on her Brexit deal on Tuesday. Today we will get to know whether May decides to delay the vote on her Brexit deal, but the biggest unknown is what happens if MPs vote down the deal. Are we going to see a second referendum, no-confidence vote, a hard Brexit, or even a general election? This will keep Sterling in a very volatile mode until the clouds clear. 


Source link  
Risk sentiment hit by IMF pessimism

A wave of risk aversion swept across financial markets today with global equities retreating as pessimism over global growth sapped risk sentiment...

Markets take a U-turn after disappointing

After a positive start to the week, Asian equities fell today amid rising concerns over the global economic outlook. The market is currently being...

EM currencies mixed despite optimism

The mood across financial markets was mixed this week as investors tussled with Brexit drama, US-China trade developments and a partial...


China stimulus extends correction

A solid kick off for the U.S. earnings season, Theresa May surviving a vote of no-confidence, China's central bank pumping record liquidity, and policymaker assurances...

Rally losing momentum

Investors have kicked off 2019 in a positive mindset. The S&P 500 rallied during 5 out of the past 6 trading days booking 3.1% gains so far...

Equities recover on trade optimism

After a terrible end to 2018 which saw global equities plummet, markets are finally seeing the color green returning to their screens. U.S. stocks built...


Optimism creates illusion of stability

The first trading week of 2019 has been explosively volatile and highly unpredictable due to persistent concerns over slowing global economic growth...

Stock markets resume rollercoaster ride

The final trading week of 2018 has been explosively volatile and wildly unpredictable due to geopolitical risks. Global sentiment repeatedly...

Risk-off sentiment intensifies

It has been a painfully bearish trading week for global equity markets as fears over slowing global growth weighed heavily on investor sentiment.


In the past 24 hours Bitcoin has lost -0.19% and reached $3599.17406438. Open your trading account with the best cryptocurrency brokers on special terms today.

In the past 7 days the EUR/USD pair has gained 1.5351% and is now at $1.1563. Start trading and making money on Forex today.

In the past 7 days Ethereum has lost -4.83% and is now at $118.130634428. Have the most popular cryptocurrencies compared online 24/7.


Top Brokers offering Forex Market Analysis



Forex Currencies Forecasts



Top 10 Forex Brokers 2019

# Broker Review
1easyMarketseasyMarkets91%
2FXTMFXTM87%
3HYCMHYCM86%
4FxProFxPro84%
5FIBO GroupFIBO Group83%
6OctaFXOctaFX82%
7HotForexHotForex81%
8FXCMFXCM80%
9XMXM72%
10FP MarketsFP Markets69%
  


Share: