US Index Futures Tumble as Post-Powell Disappointment Depth
(Bloomberg) – US stock index futures resigned Thursday due to investor's disappointment at Federal Reserve's monetary measures.
March e-mini contracts on the S & P 500 went as much as 1.1 percent, reversed a 0.5 percent gain. Futures on the Nasdaq 100 Index and Dow Jones Industrial Average fell 0.5 percent. The losses strengthened as early start-up on European trading discs had their first chance to respond to Fed's continued expectation of at least a tightening in 2019, with a breakdown on which Chairman Jerome Powell called "automatic pilot".
"The market confused" in expecting something more stupid from Fed, Taimur Baig, chief economist and CEO of group research at DBS Bank, said at Bloomberg Television.
European stocks fell to open to the lowest level of two years as all sectors of the Stoxx Europe 600 Index declined. Miners, technology and banks grabbed the drops.
Key Insights
The S & P 500 dropped 1.5 percent on Wednesday and broke February today low as markets were revolted from what they saw as a less deaf-than-hoped Fed rate boost. The central bank trimmed its prospects for hiking and cited soft global economic conditions. The drop pushed the benchmark's 14-day relative strength index to oversold territory. The Fed's lowered growth forecast followed FedEx Corp.'s warning on Tuesday about a souring business outlook and Micron Technology Inc.'s planned cuts to capital expenditures. Corporate news reinforced concerns that the world economy will worsen in 2019.
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Market Focus on Fed in 2019 May be all about balancePowell launches rate hike Caution as growth headwinds MountIn Friendless Stock Market, Powell proves no one Benefits of BullsGoldman Says China-US Deal will be 2019's top economic eventPolicy Day: Asia Stocks Finding Direction Head for 20 Month LowJapan Shares Poised for Bear Market as Bold, BOJ Spark Concerns
Market Response
Stoxx 600 Falls 1.5 % to lowest level since December. 2016 MSCI Asia Pacific Index dropped 1.4 percent Japan's Nikkei 225 stock The average went down 2.8 percent, while the Topix index fell 2.5 percent into a bear market Australia's S & P / ASX 200 Index was closed at 2 years low
"Powell could never satisfy the market," says Viktor Shvets, head of Asian Strategy at Macquarie Commodities & Global Markets, on Bloomberg Television. "Finally, the Federal Reserve always takes over, they always go too far down the line. I think they have already gone too far.
– With the help of Andreea Papuc.
To contact journalists on this story: Matthew Burgess in Sydney at mburgess46@bloomberg.net; Abhishek Vishnoi in Singapore at avishnoi4 @ bloomberg.net
To contact the editors who is responsible for this story: Divya Balji on dbalji1@bloomberg.net, Christopher Anstey
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