19.12.24 - Stock market sell-off

Global stock market tumble following the US stock markets lower after the Fed release yesterday. The US central bank cut the key rate by 0.25% as expected. However, the Fed is likely to cut interest rates less than previously anticipated in 2025 as inflation persists.

Markets: US Dow Jones Industrial Average closed over 1’100 points lower adding to the streak of 10 consecutive days with losses, the worst since 1974. Nasdaq was down almost 4% while interest rates ended higher with the 10-year Treasury yield above 4.5% again. Asian and European stock markets followed the US currently trading down. Commodities, gold and silver tanked as well while volatility soared.

My view: as highlighted already during the last days, the potential for a correction is around the corner as too much of optimism was priced in. Therefore, this sharp move lower of US stocks does not come as a surprise to me as well as the spill-over on global stock markets, gold and silver, mentioned as well.
The good news about, the US economy is doing well as the speed of the rate cut cycle can be lowered.
I keep the wait and see stance if the euphoric buyers and optimists are coming back to the market right away or the correction has some potential to continue. Right now the US markets is set for a small rebound. Let’s see if this rebound is only of technical nature or attracts more buyers again.

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