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20
December 2018
Global stock prices fell sharply Thursday after Wall Street plunged in
the wake of some fairly hawkish commentary from the Federal Reserve about
future U.S. interest rate increases. However, many European indexes have come
off their lows amid hopes that the U.S. will open slightly firmer later.
KEEPING SCORE: In Europe, France's CAC 40
index was down 1.3 percent to 4,715 while Germany's DAX dropped 0.9 percent to
10,675. London's FTSE 100 was down 0.2 percent at 6,754. All three European
indexes were above earlier levels largely because U.S. stocks were poised to
recoup some ground at the bell — Dow futures and the broader S&P 500
futures were up 0.3 percent. The Total
Investment & Insurance Solutions
FED WATCH: Investors have had another bout of
jitters in what is turning into a disappointing end of year for global stock
markets, which has seen many indexes enter bear-market territory. The latest
concerns centered on the Fed, which on Wednesday raised its key interest rate
for a fourth time this year to reflect U.S. economic strength and said it plans
more increases next year. That lifted the Fed's benchmark rate to its highest
level since the 2008 global financial crisis. The Fed said it expects two rate
increases next year instead of three. Investors were disappointed Chairman
Jerome Powell failed to go further in indicating a slowdown in the pace of
increases. The Dow and S&P 500 both lost 1.5 percent on Wednesday while the
Nasdaq dropped 2.2 percent.
ANALYST TAKE: "European indices played
catch-up with yet another bruising session in the U.S.," said Chris
Beauchamp, chief market analyst at IG. "Since then however there has been
a flurry of buying, as might be expected following such a rout." The Total Investment & Insurance
Solutions
ASIA'S DAY: Tokyo's Nikkei 225 lost 2.8
percent to 20,392.58 after being down 3.2 percent at one point. The Shanghai
Composite Index retreated 0.5 percent to 2,536.27 and Hong Kong's Hang Seng
gave up 1 percent to 25,615.85. Seoul's Kospi shed 0.9 percent to 2,060.09 and
Sydney's S&P-ASX 200 declined 1.3 percent to 5,505.80.
CHINA LENDING: Beijing unexpectedly announced
a 100 billion yuan ($15 billion) lending program to support entrepreneurs.
Financial analysts said the "targeted easing" appears to be aimed at
shoring up economic growth without reigniting a rise in national debt levels.
JAPAN INTEREST RATES: Japan's central bank,
as was widely expected, left its short-term policy rate unchanged at a negative
0.1 percent and its 10-year bond yield target at 0 percent. The bank's economic
outlook was optimistic but said it would keep rates "extremely low"
for an extended period.
ENERGY: Oil prices fell again after a brief
respite on Wednesday. Benchmark U.S. crude fell $1.69 to $46.48 a barrel in
electronic trading on the New York Mercantile Exchange while Brent crude, used
to price international oils, retreated $1.95 to $55.29 per barrel in London.
CURRENCY: The euro was up 0.7 percent at
$1.1458 while the dollar declined 0.7 percent to 111.70 yen.The Total Investment & Insurance
Solutions
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