What's next after the FOMC
So it has been announced, Fed will decrease its bond purchase by 10billion per month. Market reacted positively and DJ was up close to 300 pts ytd...a swan song for Bernake?hahaha
For our local market, STI today reaches a high of 3083 and is trading at 3064 now. A 20 pts difference from its high at the moment.
Profit taking? Or could it be more of a seasonality issue? December is usually a very slow month with weak liquidity. Was this tapering anticipated?
The tapering turns out better than most of the analyst/fund managers has anticipated. They probably anticipated a heftier cut which after the announcement, caused the DJI to soar.
However, Tapering is the first step towards raising interest rate....Tapering meant that the economy is recovering and the central bank is willing to taper and took out this artifical support(in near future)
Is rising interest rate a concern? As fed has stated that they are looking to lower unemployment rate to 6.5% before any rates hike or further tapering..In the event that this does happen, I am looking from the perspective that the improving economy then, if self sustained could actually lead to further bullishness in the market as well. It would meant that whatever money that was printed to aid the economy had work. Strong economy -> Strong market ->?
Nothing is certain, the market is always right
For our local market, STI today reaches a high of 3083 and is trading at 3064 now. A 20 pts difference from its high at the moment.
Profit taking? Or could it be more of a seasonality issue? December is usually a very slow month with weak liquidity. Was this tapering anticipated?
The tapering turns out better than most of the analyst/fund managers has anticipated. They probably anticipated a heftier cut which after the announcement, caused the DJI to soar.
However, Tapering is the first step towards raising interest rate....Tapering meant that the economy is recovering and the central bank is willing to taper and took out this artifical support(in near future)
Is rising interest rate a concern? As fed has stated that they are looking to lower unemployment rate to 6.5% before any rates hike or further tapering..In the event that this does happen, I am looking from the perspective that the improving economy then, if self sustained could actually lead to further bullishness in the market as well. It would meant that whatever money that was printed to aid the economy had work. Strong economy -> Strong market ->?
Nothing is certain, the market is always right
Comments
Post a Comment