Positive Sentiment Emerges In Stocks after Rumors of Fed Cooling Down Interest Rates
Stock Market Rallied With A Few Hitches
On 10th November, stock markets rallied globally because of the rumor that the US Federal Reserve may cool down inflation in the country. If a cool-down happens, then interest rates would automatically become less aggressive.
In the meantime, the world’s leading crypto platform called FTX, which is battling against financial difficulties, has filed for bankruptcy.
However, the oil market too rallied where the prices were boosted because of the lifting of a few Covid restrictions in China. China is the biggest importer of Crude oil.
Positive Sentiment in Stocks
Record-breaking price boosting was witnessed in the Gold market where the asset its value went beyond its 3-month high. Currently, Gold is moving towards making this week its best so far since July 2020.
All the rallies in all markets globally are attributed to the rumor that US Federal Reserve will be considering bringing down interest rates.
In Wall Street, particularly Nasdaq and S&P 500 stocks, the assets witnessed record-breaking gains which were last seen two and a half years ago.
Stocks were ripped off by 8% of their value when inflation started to take over global economies right from the beginning of 2022.
State Street’s senior strategist, Marvin Log commented that based on his analysis Fed is not inclined to be too much hawkish about interest rates.
He further noted that excitement has returned to the global stocks and the sentiment is that stability could be seen coming in.
Top Value Gainers
Promising gains were reportedly seen in the stocks pertaining to top stocks such as S&P 500, Nasdaq, Down Jones Industrial Average, etc. They individually gained an increase in value by 0.92%, 1.88%, and 0.1%.
MSCI’s Global and Emerging Markets Indexes
On the other hand, the MSCI’s global index saw its average lifted by 1.91% which the index hasn’t seen since September this year. This change too has been attributed to the expectation that Fed will be reducing the rate by 5%.
Similarly, MSCI’s other index for emerging markets too saw its average hike by 5.19. It was reportedly the highest leap the index took in a single-day performance in the past 8 months.
Markets are hoping that Fed will not raise the rate by 75 basis points as it has been doing in the past. Instead, they are expecting that rate to be declined by either 20 or 25 basis points.
In the UK, the economy is struggling to cope with the recession which has been there since September 2022. Resultantly, the national economy of the UK has been reported shrunk to three months low.
Risky Assets Market
A large number of investors were seen sending their investments into risky assets when the US released the data. Resultantly, USD’s value quickly declined by 1.6%.
