Market Update: Huge Volatility Witnessed in US Markets Yesterday

  • Dec 28, 2018 AEDT
  • Team Kalkine
Market Update: Huge Volatility Witnessed in US Markets Yesterday

It can be assumed that the market participants are presently in a situation in which decision making about the investments is indeed a difficult task. The markets are being affected by several factors like global trade environment, macroeconomic measures as well as the Federal Reserve’s outlook for the interest rate increases. The Federal Reserve has raised the rates by 0.25% in the December meeting which was very much anticipated by the broader market players. However, what surprised the market participants is the Federal Reserve’s hint about the future rate hikes. It is also important for the market investors to know that the US President Donald Trump does not support the Federal Reserve’s decision of the interest rate hikes.

The broader market is anticipating that the US economy might encounter two rate hikes in 2019 while there were expectations of three hikes earlier. Even though the Fed has reduced the pace, many investors thought that the Fed would raise the rates even slower than this. However, it is also important to note that the US central bank needs to keep the check on the inflation as well. Yesterday, Dow Jones witnessed the significant volatility but managed to close the day on the positive note. On December 27, 2018, Dow Jones Industrial Average closed the session at 23,138.82 which implies the rise of 260.37 points or 1.14%.

What Could Affect Oil Markets Ahead?

It can be assumed that the momentum in the stock markets also impacts the movement in the oil markets. Therefore, if the stock markets are in the pressure, the oil markets might also encounter some pressure on it which could impact the oil prices. At present, the oil prices are still encountering the impacts of the tensions which are related to the slowdown in the global economic growth. The worries about the global slowdown put the downward pressure on the oil prices in the sense that the demand of the oil becomes questionable. Lower demand would have an impact on oil prices.

Therefore, it can be said that the oil markets might stabilize once the stock markets continuously witness an upward trend and the global macroeconomic fears start fading away.

Australian Markets Ends the Session on Positive Note

On December 28, 2018, the Australian markets managed to close the session on the positive note. It can be assumed that since Dow Jones ended the session in green, it might have supported the Australian markets as well. S&P/ASX200 ended at 5654.3 which implies the rise of 57.1 points or 1.0%. Let us quickly have a look at the stocks which have gained momentum. On December 28, 2018, Orocobre Limited (ASX: ORE) and Emeco Holdings Limited (ASX: EHL) ended the session by rising 5.629% and 5%, respectively.

On the other hand, Bravura Solutions Limited (ASX: BVS) and APA Group (ASX: APA) ended the session by falling 2.577% and 2.523%, respectively. Orinoco Gold Limited (ASX: OGX) had made an announcement related to the extension with regards to the voluntary suspension. Read the full news here. Also, Highlands Pacific Limited (ASX: HIG) announced about the voluntary suspension. Read the full news here.


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