The reaction of the markets to the results of the US Federal Reserve meeting and the subsequent press conference of its head Jerome Powell was very unexpected. The Fed, as expected, left the rate unchanged, noting that the spread of the coronavirus pandemic has created problems for both the global and American economies. Their further dynamics will depend on the effectiveness of the vaccines.
At the same time, the Fed will continue to stimulate the American economy, including keeping the volume of redemptions of government and mortgage securities at the current level, and is also ready to adjust its policy if necessary.
It seems like nothing new and negative. It seems that the markets did not expect any new stimulating measures from the Fed. But one way or another, the stock markets collapsed. Losses on leading US indices exceeded 2%. This sometimes happens when the market is heavily overbought, and there are no reasons for further growth. However, the sales began even before the publication of the results of the FRS, and the regulator only strengthened them.
The Moscow Exchange index lost 1.4% yesterday. Moreover, the trading turnover increased, which indicates that there are real strong sales of shares.
The ruble market indicator closed at 3343.6 points. Support is located in the area of 3300 points. Taking into account the evening session and today’s decline in American futures by another third percent, we can expect that in the morning the Moscow Exchange Index will begin to storm support. And it is far from the fact that it will resist. In this case, the index can be expected to decrease by another 100 points.
However, we do not think that the correction will be long, because there are no reasons for active sales, nothing fundamentally bad happened. Very soon, investors will remember that the start of the implementation of a new stimulus package in the amount of $ 1.9 trillion is imminent, and the purchase of shares will begin when this money appears.
The dollar exchange rate in the world market also suggests these thoughts: the euro-dollar pair is still holding the important level of 1.21. That is, there is no mass exodus to the dollar yet.
But while it is too early to buy, shorts still look more promising. Sales today (at least in the first half of the day) will go on the entire range of securities. Perhaps the securities of oil companies will be slightly better than the market. Oil did not succumb to the general negative sentiment due to excellent data from the US Department of Energy. The agency reported a huge, by 9.9 million barrels, reduction in reserves and a decrease in average daily production from 11 to 10.9 million barrels.
However, this morning oil is down 0.7%, trading in the area just above $ 55 per barrel. So far, oil has managed to hold this mark and turn upwards from it.
The dollar-ruble pair closed the day only 15 kopecks below the strong resistance of 76 rubles per dollar. Today this mark will be tested at the opening of trading. It is not a fact that the pair will be able to gain a foothold above 76 rubles per dollar, nevertheless, the pair looks locally overbought. However, a more significant devaluation of the ruble is only a matter of time.
- More forecasts and news on Fortrader’s channel Telegram
Market forecasts, analytics and stock news