The investor's sentiments are being impacted nowadays primarily because of the unfavourable momentum in the equity markets. The equities are presently in a position to witness the effects of any macro event or any geopolitical factor which occurs. On December 19, 2018, Dow Jones Industrial Average has ended the session in red as the index closed at 23,323.66 which implies the fall of 351.98 points or 1.49%. Needless to say, the key event which was being tracked by the market participants was the meeting of the Federal Reserve or Fed. The US President Donald Trump has been opposing the Federal Reserve’s decision of raising the rates. However, the Federal Reserve has to keep a check on inflation with the help of the interest rates.
Federal Reserve Raises the Rates: Fourth and Final One Of 2018
As was broadly expected by the market players, the Federal Reserve moved ahead with the fourth and final rate hike of 2018 by 25 basis points or bps. After the recent rate hike announcement made by the Federal Reserve, the target range stood at 2.25-2.5%. Even though the US President was of the view that the Fed shouldn’t raise the rates, this rate hike was broadly anticipated by the market players. The rate hikes by the US central bank negatively impacts the broader equity markets. Another crucial takeaway from the Federal Reserve meeting was that the bank would now be raising the rates at a slower speed than was earlier expected. This move of raising the rates at the slower pace is decided because of the worries about the slowdown in the economic growth.
Oil Markets Witnessing the Impacts of Worries Regarding Global Slowdown
The oil markets are still witnessing the impacts of the worries related to the slowdown which might be witnessed in the global economic growth. These fears related to the slowdown impact the oil prices because, during these times, the demand of oil comes into question. The downturn in the stock markets also impacts the oil prices as unfavourable momentum in the financial markets indicate that the economy is moving towards the recession. It can be assumed that even though the reduction in the production has been announced, the participants in the oil markets are still worried about the weaker global economy.
Understanding the Performance of Australian Markets
The Australian markets ended today’s session on the negative note. On December 20, 2018, S&P/ASX200 closed at 5505.8 which implies the fall of 74.8 points or 1.4%. It can be assumed that the Australian have been witnessing the impacts of the decline in the Dow Jones Industrial Average. Talking about the stocks which ended the session with the decline, MYOB Group Limited (ASX: MYO) and Orocobre Limited (ASX: ORE) ended December 20, 2018 by falling 13.947% and 13.59%, respectively. On the other hand, NIB Holdings Limited (ASX: NHF) and Medibank Private Limited (ASX: MPL) ended the session by rising 3.34% and 3.333%, respectively.
KKR & Company has decided to reduce the offer price to $3.40 per share which severely impacted MYOB’s share price. Read the full news here. For FY 2019, BWX Limited (ASX: BWX) had made a revision with respect to the anticipated guidance of EBITDA. Read the full news here.
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