Yellen paints the markets red

Heading into the close the FTSE 100 is 70 points lower, as markets continue to digest last night’s Federal Reserve meeting. 

Janet Yellen
Source: Bloomberg
  • Janet Yellen’s statement disappoints markets
  • Heavy selling into the end of the session
  • Focus now on PMI figures around the world and Greek elections

Markets can be a fickle thing. Going into last night’s Fed meeting, talk revolved around how damaging a rate hike would be to equity markets. It turns out that no hike can also be rather problematic, especially when accompanied by a sober statement and downgrades to economic forecasts.

As a result, stocks moved swiftly into the red this morning and have stayed there all day.

Equity bulls have had a difficult month so far, with each apparent rally swiftly knocked back. However, bears have not had it all their own way, and as each dip seems to bring out the buyers, we could be condemned to more range trading as the month grinds on. Certainly, there is little sign of any real turnaround in sentiment, even if we won’t have to worry about another potential Fed rate hike until later in the year.

As the new week looms on the radar, attention now shifts to Greece, if only for a while. It will be interesting to see whether a firm government can emerge or whether the Greeks will be condemned to vote yet again. Aside from this diversion, global PMI figures, particularly from China, will be the main focus, and there will be speeches from key US and European monetary policy figures to liven things up as well. 

IGA, may distribute information/research produced by its respective foreign marketing partners within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

This information/research prepared by IGA or IGA Group is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. In addition to the disclaimer above, the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.

See important Research Disclaimer.