Market Commentary-December 22

American markets opened well and even traded more than 400 points higher in the DJI within the initial few minutes subsequent N.Y Fed member remarks. But, the selling quickly resumed as numerous focus on US government shutdown, Syria pull-out, derivatives liquidations, index rebalancing, as well as a confused Federal Reserve System. 

On Friday also has turned out to be probably the most massive traded volume of the entire year. Option expiration, along with the index rebalancing has practically all combined to generate an exceptionally active trading day.

Stocks such as Boeing, Apple, Visa, as well as Goldman Sachs with minus 7% drop, were some the worse performing stocks for various reasons and not all very good! We have seen the Nasdaq index drop an additional 3% on Friday, with a minus 8% on the week - As the index formally entered bear market territory on Friday.

NASDAQ Bear Market Chart

Also, the DJI, as well as S&P500, have gone down 2% on Friday with around 7% negative posting on the past week - The DJI and the S&P500 nears bear market picture. Count on things to get a great deal more serious, and realistically speaking, this is merely the beginning of a bear market.

The Fed has made an effort to explain its view soon after Chairman Powell’s discussion on Wednesday, and that's re-steepening the curve. 2-year/10-year’s has moved back out to 15 basis points; that is a 3.5 basis points jump in two days. 

S&P500 and DJI Nears Bear Market Charts

Weakened sentiment close for American markets rolled into Asia-Pacific, and the mood changing has been set for the entire day. Japan had taken the brunt as equities lost an additional 1% mainly because financials guided most of the way following a discouraging Bank of Japan’s firm rate stance. This prompted a revival from the Yen essential safety bid and even took it within the 110  handle during the early trading.

Even though the Shanghai index dropped nearly 1% on Friday, the H.K Hang Seng governed a positive 0.5% return as the technology, and various other political challenges were talked about. Both Australian and India indices started out much better; however, both succumbed to the region's sentiment, the consequence of which was a minus 0.7% decline for the ASX200, and also a 1.9% drop for the Bombay Stock Exchange Sensex.

European primary as well as peripheral bonds had not been showing the concern as yields continue to keep drop as the single buyer scoops up all the paper into the year-end. We did notice Greek, as well as Italian paper, expand on Friday, however still, in the month they are 32 and 64 basis points tighter the pair.

Main stock market maintained in very well for the majority of the session on Friday, however then American derivative players enter the market once again, and cash followed suit. The majority of handled a positive close, however, were only slightly higher.

The Euro-Dollar was whacked instead this week and following a volatile week finished with minus 0.6% on Friday and minus 6% on the year. Sterling lastly saw a somewhat tight trading range on Friday's session, which has been an unexpected due to the 20% decline in the month of November new vehicle sales release.

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