Overseas Market Report
The S&P 500 Index finished Monday’s session at its lowest level since October 2017. The technology, healthcare and consumer sectors led the rout. Insurance stocks suffered after a court ruling jeopardised Obamacare, while Johnson & Johnson lost ground amid a deepening asbestos scandal.
The Federal Reserve is seen as almost certain to raise interest rates at its two-day policy meeting starting on Tuesday, further enhancing the dollar’s yield attraction. At the same time, many market players also expect the Fed to lower its projections for future interest rate hikes given increasing headwinds to the economy.
On Wall Street on Friday, the S&P 500 lost 1.91 per cent to 2599.95, marking its lowest close since 2 April. The benchmark has dropped 11.3 per cent from its 20 September record close – the worst performance since it fell more than 14 per cent between May 2015 and January 2016.
In the currency market, the dollar held firm after having touched a 19-month high against a basket of six other major rivals on Friday as the US economy appeared to be in better shape than others. US retail sales excluding cars, petrol, building materials and food services rose 0.9 per cent last month after an upwardly revised 0.7 per cent increase in October.
Still, some analysts said the dollar could be held back by the probability of a partial US government shutdown as President Donald Trump and federal politicians disagree over funding for a border wall. The stopgap funding bill agreed earlier this month will expire on 21 December. Oil prices licked wounds after Friday’s falls on concerns about the global economy.
Morning-Market-Note-Tuesday-18th-December