US Markets Fundamental Outlook

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The FOMC, BOE, ECB, BOC and SNB All Coordinated Cuts Of Their Benchmark Rates

Written by John Rivera, Analyst

CFDTrading.com provides free news, trading resources, and market analysis to the trading community.

The major central banks came together in a coordinated effort and lowered their benchmark rates in an effort to stem the current financial crisis.

What To Watch For In The US Session

• Central Bank Coordinate Rate Cut
• Housing Data On Tap
• Alcoa Earnings Disappoint

The FOMC, BOE, ECB, BOC and SNB All Coordinated Cuts Of Their Benchmark Rates

The major central banks came together in a coordinated effort and lowered their benchmark rates in an effort to stem the current financial crisis. The FOMC, ECB, BoC and BoE lowered rate by 50 bps and the SNB cut by 25 bps as they tried to send a signal to the markets that a global effort is underway to correct the credit crisis. The news could give a lift to stocks today as the global community has signaled that everything will be done to help the current situation, which should help restore confidence. Dow futures went from down over 100 points to above 100 points on the news, but have since given back their gains. The move may bring buyers back to the markets and increase volume. The dearth of interest has allowed bears to sink equity markets for five straight days. The upcoming pending home sales and MBA mortgage application data is expected to show that the housing market is continuing to sink. However, the actions today will overshadow the news. We may see the reality of the situation sink in later in the day and eventually weigh on stocks. Also, Alcoa’s dismal earnings also underscore the fact that the global economy is still contracting and although the efforts today may help, it won’t cure all of the ills.

Dow Jones 9447.11
The Dow Jones Industrial Average may rebound today as the coordinated global effort will help the global growth picture benefiting multinationals. Also, the potential end to the credit crisis will help lower the elevated borrowing cost that companies have been battling. Despite, the coordinated rate cut oil prices still remain lower on the day which can signal that traders are still not that optimistic about the global economy which may continue to weigh on energy names.

NASDAQ 1754.88
Lower borrowing costs may help sustain the housing market and the confidence of consumers which could give a boost to tech names like Apple. The tech laden Nasdaq has sunk to a five year low on the declining outlook for the upcoming holiday season. Google fell 25.20 points during trading yesterday as the outlook dimmed and we could see a sharp rebound in consumer related stocks if traders believe that the crisis is coming to an end.

S&P 500 996.23
The broader index could also benefit from the coordinated effort as the potential end to the credit crisis would help small businesses that have been struggling to secure enough funding for their operations.

CFDTrading.com provides free news, trading resources, and market analysis to the trading community.
 
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