For the first time since 2009 S&P 500 might be negative for the year. The S&P 500 lost 0.34% and the Dow Jones Industrial Average dropped 0.79% during the week ending in December 18. That seems not very scary enough – right? well, Not so quick. These final numbers tell the story of the first interest rate hike seen in a while. In fact, this type of volatile has not been seen in a while.
The below are daily addition and subtraction from Wall Street for the week:
Mon + 103 pts
Tue + 156 pts
Wed + 224 pts
Thu - 253 pts
Fri - 367 pts
Wall Street saw UPs leading into the Federal Reserve announcement on the interest rate hike – and after the after the hike, things change for the worse. Investors bought the rumors and sold the news” – a pattern in which buyers bought stock in anticipation of an announcement, and then quickly sold stocks after the news released, pushing prices down. We asked “what do we do next” as investors were interested in stocks when the Fed’s hike interest rate, but turned attention to other news – such as, energy and concerns about economic growth after the facts.
Oil prices have declined 17% this past few weeks. America ended years ban on US oil exporting will this will surely increase supply even more. Prices are now below $35 per barrel a level that small and marginal oil companies cannot make money on. Interest rate hike only added to the problems for these debt-laden oil producers. As a result, high yield (junk) bond market – where many of these players obtained loan for projects had taken a beaten and this continues to weigh on the markets.
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