Markets held their breath yesterday waiting for US Fed to decide on rate, particularly on its future rate hike schedule. As a result, all adopted a wait and see attitude. But US Future opened higher expecting Fed to raise rate today but would be highly cautious about its future rate hike schedule.
At 6:00 am Australian Eastern time, US Fed confirmed raising Federal rate 25 points to 2.5%, but expected fewer rates hike as September scheduled. Dow Jones reacted negatively and sharply, not only erasing earlier gain, but shedding 300 points more.
Markets complained US Fed wasn't dovish enough, therefore they had but to dump stocks in hand. But there are also analysts pointing to a classic market operation, Buy on Rumours and Sell on Facts. It was coupled by the fact that US Stock is virtually operating within the current correction territory, and in anticipation of further global down turn in the new year, therefore markets do not expect Santa would be coming this year.
As a result, they started to sell off and we can reasonably assume global markets will follow suit.
Now CSL, Australian equivalent of Apple in US, has a heavy overseas exposure, especially in US. So it begs the question, will CSL be affected by US Fed's rate hike schedule? CEO of 123 Property Management, Charley Wang , maintains CSL still has a bright future ahead of it.
