Dow+1.28% S&P+1.50% Nasdaq+1.52% Russell+1.51% VIX 17.86 (-14.75%)
US Market closed higher after first rate hike in 9y, S&P Closed above its 50d & 200d MA. The Federal Reserve lived up to expectations, calling for a 25-basis point hike to the federal funds target range, which had been stuck in the 0.00-0.25% range for exactly seven years. Interestingly, today's rate hike did not stop the committee from slightly lowering its core PCE inflation outlook for 2016 to 1.5-1.7% from 1.5-1.8% that had been expected in September. Nine of ten sectors ended the day with gains while energy (-0.5%) spent the session below its flat line due to daylong weakness in crude oil. The energy component returned to last week's low, falling 4.7% to $35.55/bbl. after the latest EIA storage report showed a 4.8 million barrel inventory build. industrial sector (+1.8%) spent the day among the leaders, thanks in part to a 5.7% spike in Honeywell (HON 104.08, +5.61) after the company reaffirmed its guidance. Another sector component—Joy Global (JOY 12.16, +0.70)—also had a strong showing, surging 6.1%, despite reporting in-line earnings, lowering its guidance, and cutting its quarterly dividend to $0.01 from $0.20/share. Volume were above average with more than 950mil shares. FX was main asset traded, Subsequent press conference by Chair Yellen was also interpreted as more balanced than underscoring the "dovishness" of the hike, and USD saw its most pronounced gains during the address. EUR/USD initially spiked to 1.10 but traded back down to 1.09 by the end of Yellen comments and below 1.0840 in Asia. USD/JPY post FOMC low was below 121.50 but rose above 122.60 late in Asia. Higher yielding commodity currencies were sold even more aggressively on USD strength - both AUD/USD and NZD/USD were down over 1% from the highs. 2-year Treasury note yields climbed over the 1% mark for fresh multi-year highs. Japan Trade Deficit was lower than expected but mainly because imports decline of -10.2% was much worse than -7.3%e. Likewise, exports fell more than anticipated at -3.3% v -1.6%e - the largest decline since Dec 2012. Shipments to Asia and China were down over 8%, with China exports particularly soft at -8.1% v -3.6% prior - the biggest decline since Feb. In China, CASS researcher noted that any disruption from US rate hike is likely to be limited as it was expected. Overnight, CASS forecast 2016 GDP at 6.6-6.8%, CPI at 2.1%, exports falling 0.6%, and forecasting a rebound in property despite ongoing negativity in heavy industry. Weekly open market operations returned to net injection, while PBoC's Yuan fix was once again at the weakest level since mid-2011.
Nikkei +1.59% Hang Seng +0.41% Shanghai +1.56%
Eur$ 1.0862 CNY 6.4819 JPY 122.31 GBP 1.4958 CHF 0.9953 RUB$ 70.67 WTI $35.46(-0.17%)
S&P -0.25% EuroStoxx
Macro :
- Billionaire Sam Zell Says Recession Likely in Next 12 Months
- Fed Rate Hike Should Not Derail Global Stock Markets: Barclays
- Yellen Voices Economic Optimism as Fed Begins Gradual Tightening
- Hong Kong Raises Base Rate After Fed, Sees Potential Outflow
- Bond Traders to Fed: Your Rate Forecasts Are Still Too Ambitious
- U.K. Loses $24 Billion a Year to Tax Fraud, Watchdog Says
- UAE Central Bank raises Certificate of Deposit (CDS) Rate by 25bps (in line with Fed move due to currency peg)
Keep an eye on :
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- ABG SM : Spain Regulator to Investigate Abengoa Accounts: Confidencial
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- AIR FP : Carlyle, KKR Said on Short List for Airbus Defense Ops: Reuters http://reut.rs/1MhfTX6
- AF FP : Air France-KLM CEO Is Considering a Referendum, Le Figaro Says
- CS FP : AXA Boosts Qrf Holding; BNP Paribas Investment, Capfi Cut Stakes
- ENX FP : Euronext Halts Own Shares Pending Ruling on Capital Requirements
- GAM SM : Gamesa Wins Contract in India to Build 100-Mw Facility for Tata
- GLPG NA : Galapagos, Gilead in Partnership to Develop Filgotinib for RA
- GBF GY : Triton to Bid for Bilfinger Water Business, FAZ Reports
- KER FP : Kering to Pay EU1.50/Shr Interim Div. on Jan. 25
- SAP GY : ORCL Numbers +3% on guidance after hours
- SKISB SS: Skistar 1Q Pretax Loss Narrows as Sales Increase
- STAN LN : StanChart, DBS to Partner on Ledger Technology for Trade Finance
- TIT IM : Brazil’s Oi Said to Make Merger Offer for Tim as Soon as January
- FP FP : Total in Talks with Yemen Govt as Contract Deadline Looms: Union
- UBSN VX : UBS Sees 4Q Costs of CHF272m for Repurchase of Some Debt, Bond