26 August 2016 (update : 11.58 AM EDT)
U.S. markets are falling after the Fed Vice Chairman, Stanley Fischer declared in an interview with CNBC that a rate hike was imminent as the U.S. economy and labor markets continued to improve. He said that “next Friday’s jobs data will likely have an impact on the process.
Next Friday? That means September rate hike is certain?
With that thought, U.S. indexes tumbled and now, any of these lower level are possible for Dow Jones- 18,400- 18,350 or even 18,250.
The correction has started.
(Earlier : 10.13 AM EDT)
Janet Yellen, the Federal Reserve chair has told her audience in Jackson Hole that U.S. economy is improving and conditions for a rate hike have “strengthened in recent months.”
- Market reaction: Dow Jones is up 100 points, but not yet above 18,570; its resistance oh hourly charts. Back to watching up to which level this index will go- 18,600? 18,650? Or start a reversal from current levels?
- The immediate reaction was seen in currency and commodities markets where the Dollar index zoomed and Gold dropped. Major U.S. indexes have turned choppy.
- As there has been no word (yet) about a September hike, Gold reversed it gears and climbed up, the Dollar index went down. Keep watching for many such ups and downs and jittery speculators try to decipher the Fed speak.
- Currency pairs going up and down like headless chickens trying to fight Rocky Balboa Now Euro zooms against USD. A few second ago Euro was headed underground.
- Janet Yellen keeps both bulls and bears guessing with her yes to rate hike then adding conditions to it. Here are her exact remarks that still say, the Fed is ready to hike rate but remains data- dependent.
“In light of the continued solid performance of the labor market and our outlook for economic activity and inflation, I believe the case for an increase in the federal funds rate has strengthened in recent months. Of course, our decisions always depend on the degree to which incoming data continues to confirm the Committee’s outlook,” she said.
(8:16 AM EDT)
What a wonderful week this has been in stock markets! Thrilling, exciting, action-packed- not to say entertaining with crazy ups and downs in major global indexes.
The final and most awaited session in U.S. markets is still more than an hour away, but the Fed Chair, Janet Yellen has arrived for the Jackson Hole summit (Wyoming) and will be making a speech at 10 AM EDT. The financial world is not expected to move, breathe or blink till then.
Markets are expecting to hear something about the central bank’s rate hike plans. Specifically, if there is going to be a rate increase next month? This year? Or, will the Fed continue with its hemming-hawing financial gibberish that we read after every FOMC meeting.
In between, the GDP numbers from the U.S. economy will be released in a few minutes from now.
But today, nothing matters expect Janet Yellen’s speech in Jackson Hole summit. Till then, its no use discussing trading levels of any index. We may or many not have a mini (or full blown) earthquake in markets based upon what the Fed Chair says (or leaves unsaid).
As we said, the fun-levels keep going up in markets
We’ll wait, keep our fingers crossed and cover LIVE how markets react to that event.
Stay tuned for more thrilling action in stock markets!