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Fed Hope Conquers Business Fear

Published 17/06/2019, 20:28
Updated 14/12/2017, 10:25

Stock market snapshot as of [17/6/2019 3:25 PM]

Cash Indices 17 June

  • There are signs that U.S. investors continue to half-suspect bad news may in fact be good news in a monetary policy context, particularly with the Federal Reserve meeting beginning tomorrow
  • Although normally deemed ‘second-tier’, the New York Fed’s Empire Manufacturing gauge caused a stir. The headline collapsed to minus 8.6 in June from 17.8 in May. A sharp slump in business sentiment in the region was driven by an equally swift reversal of business orders
  • S&P 500 and Nasdaq cash markets turned green soon after they opened, and all major indices traded higher just now
  • With just as much uncertainty to go with deeply priced-in expectations of Fed easing, stock markets are likely to continue wavering till Fed events on Wednesday. Policy updates from the Bank of England and Bank of Japan later in the week will keep suspense going to a lesser degree
  • European indices are mixed though there was more red on show earlier as relative cross-market calm was shown to be shallow

Corporate News

  • Large and troubled German groups dominate the start of the European week. Deutsche Lufthansa (LON:0H4A)issued its second profit warning of the year as it doubled down on growth versus profits in attempting to bolster market share at low-cost unit Germanwings. The carrier’s shares slumped as much as 13%
  • Deutsche Bank (LON:0H7D) went in the opposite direction, trading 1%-2% higher after floating a plan to create a ‘Bad Bank’ to house up to €50bn loss-making derivatives assets
  • Facebook (NASDAQ:FB) is a U.S. standout, rising around 3%—helping account for Nasdaq’s 0.7% advance—as it details plans for a digital currency
  • Sotheby’s (NYSE:BID) was bid around 60% higher. It has agreed to be taken private by Patrick Drahi, the founder of European telecom group Altice, for $2.7bn

Disclaimer: The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient.

Any references to historical price movements or levels is informational based on our analysis and we do not represent or warrant that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, the author does not guarantee its accuracy or completeness, nor does the author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

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