A Merry Christmas and thanks for your support during 2013 December 19, 2013 AFTER months of speculation about how the markets would react to the gradual phasing out of monetary stimulus in the US, we got part of our answer over the last 36 hours. And, it has to be said, it’s so far so good. Some assumed that even a hint of a tightening of monetary policy [...]
What the other papers say this morning – 20 December 2013 December 19, 2013 FINANCIAL TIME Taper pressures emerging markets Markets soured on the day after the US Federal Reserve’s dramatic tapering of its asset purchases from $85bn to $75bn per month as the dollar climbed and vulnerable emerging markets came under pressure. The taper heralded a new era of dollar strength, with the US currency up by 0.6 [...]
London Report: Pharma giants and Fed move lift FTSE to a two-week high December 19, 2013 BRITAIN’S main share index rose to a two-week high yesterday, helped by gains in pharmaceutical stocks and by a pledge from the US Federal Reserve to keep interest rates low. Some investors expect the blue-chip FTSE 100 index to rally into the end of 2013, forecasting gains of roughly 50-150 points between now and the [...]
How the US managed to avoid a Japanese style tapering crash December 19, 2013 Many thought that the Federal Reserve would never taper – or that when it did that markets would crash. But Federal Reserve chairman Ben Bernanke has managed to avoid a slump of the kind Japan witnessed in 2006. Then – as Bank of America Merrill Lynch's Michael Hartnett points out – stock values fell by [...]
The taper that wasn’t a taper is seeing European stocks rally. Here’s why December 19, 2013 It's a taper, but not as we know it. Ishaq Siddiqi, market strategist at ETX Capital, says that the decision has removed much of the volatility that we've been seeing in the final quarter of this year, and gears us up "for a delayed but eagerly anticipated “Santa Rally” to finish this year in a [...]
What you need to know before the open – 19/12 December 19, 2013 So the Fed is going to start tapering its $85bn asset purchase programme. From January, it'll buy $75bn of mortgage and Treasury bonds each month – a modest cut, but one that caught markets off-guard last night, with many calling it wrong. Equity markets saw an immediate sharp sell-off, although that quickly reversed on the [...]
Fed shocks stocks into taper rally December 18, 2013 THE US Federal Reserve shocked markets last night by announcing a tapering of its enormous monthly stimulus programme – yet stocks jumped thanks to the modest size of the cut and a notably dovish accompanying statement. From January, the Fed will purchase $75bn of mortgage and Treasury bonds each month, down from the current rate [...]
Ben’s last rally December 18, 2013 The Fed’s board members now think that unemployment will drop slightly more in 2014, to as low as 6.3 per cent. Bernanke expects that tapering will continue in “moderate steps” through most of next year”. The rate-setting Federal Open Market Committee (FOMC) now expects that low rates will remain in place until unemployment falls “well [...]
FedEx bullish for the full year December 18, 2013 FedEx raised its full-year earnings forecast yesterday but its quarterly results missed forecasts. It sees full-year earnings per share growth between eight and 14 per cent above last year, up from its previous forecast of between seven and 13 per cent. FedEx earned $500m, or $1.57 a share, in the second quarter ended 30 November, [...]
London Report: Supermarkets help to push FTSE down amid thin trading December 18, 2013 THE UK’s main equity index steadied in thin trade yesterday, with investors cautious before what is seen as a tight policy decision by the US Federal Reserve, and with a sell-off in retailers putting a lid on any gains. Strong US data, including yesterday’s forecast-beating housing starts, has fuelled expectations that the Fed could scale [...]