Market Watch – December 21, 2018
Hopes For Santa Claus Rally Fade as Fed Announcement Disappoints
Investors counting on a more dovish stance from the Fed were largely disappointed Wednesday as the central bank proceeded with another 25-basis-point hike, while signalling a somewhat milder path of increases for 2019. Major indexes headed south following the Fed’s announcement and then fell even further during Fed Chair Jerome Powell’s remarks, with the Dow swinging nearly 900 points over the day`s trading session. The tech-heavy Nasdaq also took the news hard, dropping 147 points for the day, while the TSX surrendered 153.
It’s been a rough week so far for North American markets. Major indexes opened somewhat lower Monday and began a steady descent around midday. By day`s end, the Dow had dropped 508 points to its lowest level of the year, while the Russell 2000 small-cap index entered bear-market territory. Although markets were slightly higher Tuesday, the downward slide resumed Wednesday and Thursday, as pessimism over global growth prospects and tumbling oil prices continued to weigh on markets. In late trading Thursday, the Nasdaq was perilously close to bear-market territory, while 10 of 11 sectors in the S&P 500 were down, led by losses in energy, tech and consumer discretionary. U.S. stocks are now off to their roughest December start since 1980.
Oil prices fell more than 4% on Thursday, hitting their lowest mark in 15 months on worries about oversupply and waning energy demand. Meanwhile the loonie on Thursday touched its lowest level since June 2017, trading just above 74 cents.