Weekly Market Update: Fed Chair Spooks Already Fragile Markets Fearing a Slowdown
The quarter and year drew mercifully towards a close in what was another bruising week for investors. Concerns surrounding global growth heading into 2019 lingered amid heightened speculation on just how much the US Fed would incorporate those worries into their rate policy statement on Wednesday. Another string of weak economic readings, particularly in core Europe and China, along with some deceleration evident in the US economy only exacerbated that trepidation and manifested itself in downward moves for global equities and commodities, most notably continued pressure on crude oil prices. Wednesday’s FOMC statement failed to meet mounting dovish expectations and Chairman Powell’s press conference delivery further underwhelmed those same investors. The Chairman emphasized the Fed would remain data dependent into 2019 and at this point most FOMC members now forecast two hikes next year rather than three given the strength of the US economy. Dovish tweaks to the statement language and the press conference itself did nothing to change sentiment and investors resumed selling stocks. US indices plumbed through the February lows, the NASDAQ officially fell into bear market territory, and the Transports careened lower, further worrying Dow theorists. Dysfunction in Washington DC didn’t help either as the President and Congress veered towards a government shutdown as the two sides fought over funding for the Mexico border wall. Gold prices rose above the 200 day moving average and the VIX jumped above 30 for the first time since February. The S&P500 had its worst week since 2011, falling 7.1% and the Russell 2000 was down 8.2%. The DJIA and Nasdaq had their worst week since 2008, plunging 6.9% and 8.4%, respectively. In corporate news this week, Nike jumped after reporting results. FedEx crystalized concerns about international growth. Pfizer and Glaxo announced they would combine their consumer businesses, creating an over-the-counter-drug monolith. Qualcomm won a ruling against Apple in a Munich Court that would ban the sale of some iPhone models in Germany. Jack in the Box announced it was exploring strategic alternatives and has spoken with potential buyers, though no timelines for a deal are known. The Malaysian government lodged criminal charges against Goldman Sachs and said it would seek $7.5B in damages from the American bank over allegedly fraudulent dealings with the state development fund 1MDB.
Macro :
- Trump Said to Discuss Firing Fed’s Powell After Latest Rate Hike
- Le Pen’s RN Would Lead French Vote in EU Elections W/ 24%: Odoxa
- *VIX RISES TO 31.35, HIGHEST LEVEL SINCE FEBRUARY 9
Keep an eye on :
- ABIO FP : Albioma To Buy 60% Stake in Generation Unit From Jalles Machado
- AGRO SS : Agromino-Mabon Offer Unconditional After Condition Completed
- BAVA DC : Bavarian Says FDA Accepted BLA for MVA-BN Smallpox Vaccine
- BBVA SM : BBVA Gets ECB Approval for Appointments, Chairman’s Revised Role
- BP/ LN : BP Sold U.S. Wind Energy Assets to Ares Amid Restructuring
- CRG IM : Carige Receives ECB Approval for Capital Increase Up to EU400m
- DBV FP : DBV Tech Erases Late Surge After Aimmune Files With FDA Post-Mkt
- DB1 GY : Deutsche Borse Fined for Alleged Insider Trading Case
- DIA SM : Dia expects to sign refinancing agreement next week
- EDP PL : EDP Renovaveis Sells Stakes in Two U.S. Wind Projects for $400m
- ENEL IM : Enel Green Power Sells 50% of Joint Venture EF Solare to F2i
- FAG SS : Fagerhult to Buy Iguzzini Illuminazione; Plans Rights Issue
- FTK GY : FinTech Group Bank Reports EU6m Loan-Loss Provision
- MRK GY : Merck KGaA & Pfizer End Javelin Ovarian 100 Trial of Avelumab
- MIR SS : Miris Human Milk Analyzer Cleared by U.S. Regulators
- OUT1V FH : Utokumpu Has Signed Two New Loan Pacts of EU200m
- RNO FP : Carlos Ghosn to Be Detained Until Jan 1: Tokyo Court Says
- STAN LN : U.S. Extends StanChart Sanctions Oversight Until End of March
- SDRY LN :
- TEVA IT : Teva Says FDA Approves Proair Digihaler for Asthma and COPD
- FP FP : Argentina Authorizes YPF, Total Extra NatGas Exports to Chile
- FP FP : Total Fined EU500,000 by Paris Criminal Court in Iran Case (1)
- UBSG SW : UBS to Pay $68 Million for Manipulating Interest Rates
- VLA FP : Valneva’s VLA1553 Gets FDA Fast Track Designation
- DG FP : Vinci Airports Raises €420m Loans for Belgrade Concession
- WTB LN : Whitbread Sale of Costa to Coca-Cola Gets EC Clearance