Market Commentary March 21, 2019

The Trading Daily Market Commentary features a summary of selected market segments as well as economic matters. Its content of interest is made available to all traders and investors at large

The stock market saw expected volatility after the Fed's announcement of the central bank latest monetary policy declaration. The major indices bestowed wild fluctuations before the session ends on opposing planes of the unchanged price line.

The Nasdaq 100 index inched up 0.1 percent to a new 5-month closing high finishing at 7,381, and the DJI dropped 142 points or 0.6 percent to conclude the session at 25,746, while the broad S&P 500 index fell just over 8 points or 0.3 percent to finish the day at 2,824.

The stock market initially responded positively following the Federal Reserve statement which was widely foreseen as to leave the rates unchanged and be 'patient' while further designating the Federal Reserve no longer anticipates to increase interest rates in 2019.

The Federal Reserve elected to support the spot range for the Federal fund's interest rate staying 2_1/4 to 2_1/2 percent being in supporter of its order of encouraging highest employment state and price confidence.

Although the US economy is steadily slowing, the unemployment numbers continue to be on the low side. A monthly aggregate number of 223K new jobs grew during last year; however, that figure is expected to drop during 2019 as fewer people are hunting for work. The Federal Reserve concludes that the unemployment number will be stable at around 3.8 percent by the end of the year 2020.

Inflation calculations numbers are expected to rise from 1.7 percent to 1.8 percent by the end of 2019, which by the way is significantly weaker than the last year forecast of 1.9 to 2 percent. It is now assumed that the number will touch at least 2 percent by the next year. 

The central bank attributed the decrease in energy prices as a principal cause for the lowering amount of inflation. So, all in all at this point are humble views, of course, it will be exciting eighteen plus months ahead for the market, and therefore anything is possible. 

Other Market(s)

Yesterday market was a mixture in the major Asia-Pacific region. Core Shanghai index weakened 0.01 percent, South Korea Kospi index sank 0.02 percent, while H.K. Hang Seng slumped 0.49 percent. The Aussie ASX 200 index decreased 0.32 percent. But, Japan Nikkei 225 index and India Sensex took the counter direction, increasing 0.20 percent and 0.06 percent respectively.

America and China trade deal continues to be top-of-mind, as uncertainty hovers on development from here, President Donald Trump declared that the tariffs situation could remain to be a problem for quite some time.

A red session for major Eurozone equity markets. The French CAC40 index shaved 0.80 percent to close at 5383, the U.K. FTSE100 index fell 33 points or minus 0.45 percent to conclude at 7,291, while German DAX30 plunged 185 points or minus 1.57 percent to finish the day at 11604.

In the bond market, US Treasuries bounced sharply higher in answer to the Federal Reserve decision. Consequently, the yield on the benchmark 10-year note, which flows in the opposite of its price, dropped by 7.9 bp to a much more than the one-year low of 2.535 percent on the close.

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