Morning Report Thursday 17 December 2015
We have lift off, the Fed raises rates!Good morning everyoneOverviewIt's been the main topic of discussion in markets for a long time but this morning at 6am AEST the Fed finally raised interest rates, for the first time in almost a decade, by the expected 0.25% - see chart 1.This increase had been widely telegraphed to markets with this morning’s comments from Janet Yellen that further increases would be gradual being interpreted positively rallying the Dow over 150 points after the announcement.As the Fed ended the zero interest rate era it also signalled a target of four more 0.25% rises for the US as the FOMC becomes more comfortable with underlying strength of their local economy. Interestingly, after the rate rise and statement implying a significant four further rises in 2016, the $US Index fell, albeit it marginally … a classic "buy on rumour, sell on fact" scenario.Turning to the MarketsThe Dow closed up an impressive 224 points last night. Market Matters still believes that US equities will make new all-time highs in the short term, a view we have held for some months. Technically we believe that the US markets will rally another 5-6% before completing this major bull market from 2009.- see charts 2 & 3.Investors believing the advance in US equities will continue unabated should look at charts 1 &3:
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