After 7 weeks of uninterrupted rise (and 12 to 16.5% gains without the slightest consolidation), the FED seems to have set off the final bouquet with an all-time record on the Dow Jones (+1.4% to 37,090), and a shower of annual records on the S&P500 (+1.37% to 4.707), the Nasdaq +1.38% to 14,733, the Nasdaq-100 +1.2% to 16,550... for an annual gain of +51%.

This is the 2nd time in the 21st century that such a record has been achieved, after 2009, but that's nothing to sneeze at: the Nasdaq had just lost almost 55% between the end of 2007 and March 2009.

The Russell-2000 closes one of its best sessions of the year with +3.52% (at 1,947), with easing interest rates providing a welcome breath of fresh air for small caps.
The 3 main US indices close at their highest for the day, for the month of December and for the year... and since the end of January 2020, at the end of the best (+15% on average) and longest year-end rally since 2019.

The easing of rates (towards 4.02% for the '10 yr') sent financial stocks soaring, with Zions Bancorp +9%, Boston +8.5%, Citizens +7.6%, Comerica +7.2%, Fifth Bancorp and Kimco Realty +6% Wells Fargo +3%, Goldman Sachs +2.9%, Citigroup +2.6%.

Contrary to previous sessions, semiconductors were not the driving force, this role being ceded to utilities +3.7%, real estate +3.6%, consumer goods +1.7%.

Apple, however, broke an all-time record with +1.4% at $198, representing a market capitalization of $3,070 billion.

Jerome Powell's comments at the post-FOMC press conference, which were considered to be very dovish, caused the yield on T-Bonds to plunge by -18pts to 4.020%, while the 30-year note eased by -13pts to 4.17%.

The FED takes note of the slowdown in inflation and even estimates - according to its own assessment methods - that core inflation is only rising by 3.1% over 12 months, and not by 4% as revealed on Tuesday.

The FED indicates that rate hikes are beginning to have a dampening effect on activity, which is expected to slow in Q4.

This violent fall in yields pushed the dollar down 1% against the euro (1.0895), -1.6% against the Australian dollar and -1.7% against the yen, which soared to 142.90.

The Dollar Index fell -1% to 102.85, the decline being limited by the relative weakness of the Swiss franc (+0.4%) and the pound (+0.45%).


Copyright (c) 2023 CercleFinance.com. All rights reserved.