Global stocks fall following Fed interest rate hike

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Market volatility: When should you buy?

SkyBridge Capital senior portfolio manager Troy Gayeski and Permanent Portfolio Family of Funds President Michael Cuggino discuss whether investors should jump back into the market after the Federal Reserve raised the federal funds rate.

Stocks in Europe and Asia fell in Thursday’s trading, following Wall Street’s drop, after the Federal Reserve raised interest rates for the fourth time this year.

Dow Jones futures were down by 0.2 percent. The S&P 500 slipped 0.2 percent and the Nasdaq Composite was off 0.1 percent.

In European trading, London’s FTSE traded down 0.4 percent, Germany’s DAX dropped 1 percent and France’s CAC  fell 1 percent.

In Thursday’s trading in Asian markets, Japan’s Nikkei closed the session down 2.8 percent, to a 15 month low.

China’s Shanghai Composite ended the day down 0.5 percent.

Hong Kong’s Hang Seng fell 0.9 percent at the close of trading.

China’s commerce ministry said there are plans to hold more trade talks with the United States in January, adding that both sides exchanged views on arrangements for negotiations in the latest vice-ministerial level call.

As expected, policymakers at the central bank said they voted to hike the benchmark federal funds rate by a quarter percentage point, setting a range of 2.25 percent to 2.5 percent.

Wall Street and investors were closely watching the Fed’s announcement after Chair Jerome Powell struck an optimistic note about the state of the U.S. economy in November, suggesting that interest rates are nearing neutral.

Ticker Security Last Change %Chg
I:DJI DOW JONES AVERAGES 23323.66 -351.98 -1.49%
SP500 S&P 500 2506.96 -39.20 -1.54%
I:COMP NASDAQ COMPOSITE INDEX 6636.827 -147.08 -2.17%

The major indexes were all higher until the 2 p.m. ET announcement, when investors noted that the interest rate announcement was not couched in as dovish language as many had hoped.

Notably, the Fed predicted “some further gradual increases” in its guidance, which didn’t satisfy investors who wanted to see the Fed drop “further gradual” from its outlook on possible future rate hikes.

At one point after the central bank’s announcement, the Dow Jones Industrial Average was down 500 points. It settled at 23,324 — its low for 2018.

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On the economic calendar, investors will get the weekly report on jobless claims as well as a check on manufacturing in the Mid-atlantic region.

Among the companies reporting earnings; Carnival Corp., ConAgra, Walgreens and Nike.

2018-12-20 10:16:28

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