Market Wrap – Markets Explode Higher After Fed Tapers as Expected

In today’s post market wrap live from the Meta trading room traders discussed US stock and futures markets after the FOMC meeting saw explosive rallies across the board. Listen to our impromptu roundtable on the Fed, where markets are heading, managing losses and market Psychology.

Live on YouTube:

Enjoy live commentary from Our Trading Room at YouTube as the day wraps up – feel free to like and share

Listen to how the day unfolded, what to expect from the Fed and what the charts were telling us. Our traders discuss what to expect and watch for overnight through to the BoE and beyond. We go over Apple, NVDA lifting the Nasdaq, S&P 500 and the Russell put in violent reversals higher. Oil was already on the bounce after a bullish EIA report joined the rush higher. Natural gas is flirting with weather models.

We talked technical analysis followed by a candid roundtable on the Fed, where markets are heading, managing losses and market Psychology. natural gas through charts and crowd behavior. Listen to how the day unfolded, what to expect from the Fed and what the charts were telling us. Our traders discuss what to expect and watch for overnight through to the FOMC and beyond.

Market Closes

  • WTI crude futures rose 0.5%, or $0.32, to $70.89/bbl. 
  • U.S. Dollar Index rose 0.3% to 96.36
  • Dow industrial average rose 283.23 points or 1.08% at 35927.44
  • S&P index rose 75.74 points or 1.63% at 4709.84
  • NASDAQ index rose 327.95 points or 2.15% at 15565.59
  • Russell 2000 rose 35.55 points or 1.65% at 2195.208

S&P 500 sector watch:

  • Ten of the 11 S&P 500 sectors still closed lower.
  • The energy sector was the only one of the S&P 11 sectors to decline (down -0.5%)
  • The technology sector was the biggest winner (up 2.6%)
  • Health care (+2.1%), utilities (+1.7%), real estate (+1.5%), and consumer staples (+1.2%)

Markets YTD

  • S&P 500 +25.4% YTD
  • Nasdaq Composite +20.8% YTD
  • Dow Jones Industrial Average +17.4% YTD
  • Russell 2000 +11.2% YTD

Bonds

In the Treasury market, the fed-funds-sensitive 2-yr yield settled higher by just one basis point to 0.67% after hitting 0.72% in the wake of the FOMC statement. The 10-yr yield rose three basis points to 1.46%

News Highlights

  • Total retail sales were up 0.3% month-over-month (consensus +0.8%) as were retail sales, excluding autos (consensus +0.9%). On a year-over-year basis, total retail sales were up 18.2% and up 19.5% excluding autos. 
  • Import prices increased 0.7% in November after increasing 1.5% in October. Excluding oil, import prices increased 0.5% after increasing 0.5% in October.
  • Export prices increased 1.0% after increasing 1.6% in October. Excluding agriculture, export prices increased 1.0% after increasing 1.7% in October.
  • The Empire State Manufacturing Survey increased to 31.9 in December (consensus 25.0) from 30.9 in November.
  • The NAHB Housing Market Index increased to 84.0 in December (consensus 84.0) from 83.0 in November.
  • Business inventories increased 1.2% m/m in October (consensus 1.0%) following a revised 0.8% increase (from 0.7%) in September.
  • The weekly MBA Mortgage Applications Index decreased 4.0% following a 2.0% increase in the prior week.

US Producer Price Inflation Continue Rising At Record Pace in November

US Producer price inflation continues elevated, a long way from the Central Bank transitory mantra. Annual PPI rose to 9.6% in November. Over 60 percent of the October increase can be traced to a 1.2 percent rise in prices for final demand goods. This was the largest increase since data were first calculated in December 2009.

Read More: US Producer Price Inflation Continue Rising At Record Pace in November – TRADERS COMMUNITY

Tomorrow Central Bank Deluge Continues

  • 03:30     SNB Interest Rate Decision (Q4)
  • 03:30     SNB Monetary Policy Assessment 
  • 04:30     SNB Press Conference 
  • 07:00 BoE Interest Rate Decision (Dec)  
  • 07:00 BoE MPC Meeting Minutes
  • 07:45     ECB Monetary Policy Statement 
  • 07:45     ECB Interest Rate Decision (Dec)  
  • 08:30     ECB Press Conference 
  • 21:30     BoJ Monetary Policy Statement 
  • 21:30     BoJ Press Conference 

European Manufacturing Services Composite PMI

  • 03:15 French
  • 03:30 German
  • 04:00 EU
  • 04:30 UK

Tomorrow US Data Watch

  • 08:30 Building Permits (Nov)     
  • 08:30 Jobless Claims
  • 08:30 Housing Starts (MoM) (Nov)         
  • 08:30 Philadelphia Fed Manufacturing Index (Dec)           
  • 09:15 Capacity Utilization Rate (Nov)  
  • 09:15 Industrial Production (MoM) (Nov)
  • 09:45 Manufacturing PMI (Dec) 
  • 10:30 EIA Natural Gas Storage
  • 11:30 4-Week Bill Auction        
  • 11:30 8-Week Bill Auction        

Wednesday Earnings Include

  • Accenture, Adobe, Jabil and FedEx

Trust you all had a great day, sleep well and get your trading plan sorted.

Any questions please feel free to ask them below. Trade Smart!