The appeal of the Ministry of Finance of the USA to the leading banks of wall Street and the convening of the emergency group on financial markets at the White house did not bring the Christmas miracle to the new York stock market: the last trading day before Christmas, stocks of the States noted a new collapse
To 20.11 GMT Monday, the S&P slipped another 1.8% in addition to 17% drop since the beginning of October.
“Nasdaq” dipped by 1.21% and “Dow Jones” – on 1,93%. Both indices have updated the lows since September last year. After the American stock collapsed oil prices. Futures on “Brent” fell by 6%, falling below $ 52 per barrel for the first time since September last year.
In the evening the head of the U.S. Treasury Steven Mnuchin contacted by phone with top managers of Goldman Sachs, “Bank of America Merrill Lynch”, “Morgan Stanley” and three more top banks to discuss the record with the 2008 market decline, slept 5 trillion dollars of capitalization for the quarter.
The banks said that they have “ample liquidity for lending and operations on the market” and that none of them is in a situation of a margin call, when the losses are in urgent need of cash infusions.
But markets is “not impressed”, says chief investgator “Independent Investor Alliance” Chris Zaccarelli:
“Everyone understood that meant Mnuchin, but he simply ignored”
The credit market in the US, meanwhile, stood up: according to “Bloomberg”, in December there has been no placement of high yield bonds and in limbo left of the transaction at $ 11.7 billion of this amount, banks are unable to sell corporate debt to end-investors and forced to keep it in balance.
In an explosive cocktail of tightening of the fed’s policy of monetary contraction and trade war with China added new ingredients: the growing conflict with the trump Fed and the government shutdown.
Trump refused to sign the budget without $ 5 billion for the construction of a wall at the border with Mexico and again lashed out at the Federal reserve, calling it “the only problem, which is the American economy.”
“They don’t feel the market. The fed is like the golfer who <…> can not put the ball in the hole” — trump wrote
According to “Bloomberg”, he considered the ability to dismiss the head of the fed Jerome Powell, who in December for the fourth time since the beginning of the year raised the interest rate.
A further drop of the market will provoke the increased sales of robots and trading algorithms that are adopted from large hedge funds, warns Saeed of Abusers, co-founder of “Ark Capital Management”:
“According to the “NYSE” automated manufacturing gives 80% of the turnover of the stock market. Purchases from the traditional investors can’t wait: stocks fell sharply, and show their presence in the portfolios at the end of the year or even increase these investments, few dare” — he adds