The Janet Yellen-inspired Santa Rally on world stockmarkets continues. Remember how markets, led by Wall Street swooned and fretted at every mention of the US Federal Reserve slowing its huge easing program – Taper Tantrums was the description given by nervy investors, frightened the central bank would be taking the punch bowl away.
Well, the bowl is well and truly tucked up in the dishwasher and the Fed is now talking about raising rates – in a patient fashion – and what happens – a surge to rival the sugar surges seen during the days of quantitative easing.
The Dow ended up 420 points, the biggest one day rise since November, 2011, or more than 2.4%. It closed at 17,778.15.
It was the first time in more than six years that the Dow recorded two consecutive days of gain exceeding 200 points, according to Marketwatch.
The S&P 500 jumped 48.34 points, or 2.4%, to 2,061.23, it’s biggest one-day gains in nearly two years.
The Nasdaq Composite ended the day with a gain of 104 points, or 2.2%, at 4,748.
European markets were up by as much as 3% and more on the day as they caught up to the Fed’s post meeting statement and comments from chair, Janet Yellen which have reassured markets rather than scared them.
The market, for once, ignored a sharp, 4% plus slide in global oil prices in afternoon trading.
The upshot is a second solid ahead for our market with a gain of between 40 to 50 points, according to overnight futures trading on the ASX 200.
That was after the ASX 200 and All Ords rose 0.9% yesterday.
The Aussie dollar was trading around 81.50 US cents and looking to edge lower. Gold prices were a touch higher around $US1,197 an ounce (no real gain though over the past few days).
Comex copper in New York dipped 2 cents to $US2.85 a pound after Chinese house prices fell for a third month in a row.
The S&P 500 is up more than 13% this year after notching a 30% jump in 2013.
The S&P 500 was up 1.8% at the close on more than 2,050 points. However it is still down almost 1% in December so, so far.
If it fails to erase the loss, it will be the first month of losses for the S&P 500 since 2007.
Brent crude reversed early gains overnight, which took it as high as $US63.70 a barrel, to close down more than $US1.70 at $US59.39. West Texas type crude, the key US marker, also saw early gains before a sell off took it down to new five year closing low of $US54.97 and lower in early Asian trading this morning.
Earlier in the night the Swiss National Bank, the country’s central bank introduced negative interest rates on short term deposits to defend the franc at $1.20. It worked and sent a message to the markets that it will again do anything to keep the country’s currency at that level.
