France is in Our Thoughts and Prayers.
We all watched in horror and fear last weekend as the acts of terror unfolded in France. Viewing the horrific scenes during the weekend was a stark reminder of the different world we live in today and the risks of everyday life. Our thoughts and prayers remain with all the victims and their families.
By the end of the weekend, as I solemnly prepared for a new work week, my concerns and fears moved to the financial world and the global equity markets. We were already coming off of a bad week in the U.S. Equity markets trading negatively into Friday’s close. The last thing the markets or the global economies needed was additional fear especially at the heart of the consumer. As I went through my morning routine on Monday, I was pouring my coffee, reviewing overseas markets while anxiously checking on U.S. equity futures. The only question in my head was how far down futures would be while fearing the likely answer was limit down. To my surprise, futures were strongly green!
As the terror attacks tried to rip apart a global world and cause fear and divisiveness, the financial markets seemed to be banding together and rallying to send a strong concerted message back to ISIS. To France’s credit, they led with impressive measures and went on the attack with raids and bombings. Not far behind was Russia who had finally determined that the passenger jet that crashed over Sinai, Egypt was brought down by a bomb in an act of terror. Russia joined France in the attacks on ISIS. The offensive was also taken to cyberspace as Anonymous, the international online network of activist and hacktivist entities, vowed to use their hacking powers to thwart ISIS. These impressive and coordinated efforts on the ground, in the air, and over the internet were a powerful show of global unity against evil. The global financial markets rallied around this unity. The response has been impressive and encouraging for the financial markets and more importantly for the global fight against terrorism.
What’s On Tap This Week?
More Fed watch as December draws near and investors brace for the probability of the first rate hike in nearly a decade. From Fed minutes released yesterday on last month’s meeting, the Federal Reserve indicated that the U.S. economy “could well” be strong enough to withstand a rate hike in December. Fed governors also seem to have indicated in a fairly consensus manner that any rate hikes would be slow and gradual. This seemingly clearer message from the Fed has given the equity markets a further lift as some uncertainty starts to come out of investor psyche. In the coming weeks, investors will be fixated on further economic news to gauge the ultimate decision on December 16th. It has been many years since we had this close of a Fed Watch and it brings me back to the days of Alan Greenspan and trying to gauge how thick his briefcase was before a meeting. (For those that remember, if Mr. Greenspan carried a thick briefcase it was assumed that it contained his supporting documentation to hike interest rates).
The markets will have a close eye on not only the Fed and further clarity, (or removal of uncertainties) but will start to turn its attention to the global economic market and prospects of the New Year. We are hopeful that anticipated clarity from the Fed in December will allow for an extended year-end rally. Most importantly, we are hopeful that the world continues to unite against terror.
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