(CercleFinance.com) – After 7 weeks of uninterrupted rise (and 12 to 16.5% gains without the slightest consolidation), the FED seems to have unleashed the final bouquet with an absolute 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 a gain annual increase of +51%.
This is the second time that such a remarkable score has been reached in the 21st century, after 2009, but nothing to see: the Nasdaq had just lost almost 55% between the end of 2007 and March 2009.
The Russell-2000 completed one of its best sessions of the year with +3.52% (to 1,947), the relaxation of rates providing a welcome boost to the ‘small caps’.
The 3 main US indices close at the highest of the day, of the month of December and of the year… and since the end of January 2020, at the end of the most beautiful (+15% on average) and longest end rally year since 2019.
The easing of rates (towards 4.02% for the ’10 year’) is causing financial stocks to soar 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%.
Unlike previous sessions, semiconductors did not serve as locomotives and ceded this role to ‘Utilities’ (community services) +3.7%, real estate +3.6%, consumer goods +1.7 %.
Apple, however, broke an absolute record with +1.4% to $198, or $3.070 billion in capitalization.
The words of Jerome Powell – considered very ‘doves’ – made during the post FOMC press conference caused the yield of T-Bonds to plunge by -18Pts towards 4.020%, the ’30 years’ relaxed by -13Pts towards 4.17 %.
The FED takes note of the slowdown in inflation and even estimates – according to its own evaluation methods – that ‘core’ inflation is only increasing by 3.1% over 12 months, and not by 4% as previously revealed. this Tuesday.
The FED indicates that rate increases are starting to have their curbing effects on activity, which should slow down in the 4th quarter.
This violent drop in yield sends the Dollar 1% lower against the Euro (1.0895), -1.6% against the Australian Dollar and -1.7% against the Yen which soars towards 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%).
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