Experts consider December 2018 as the most failed for almost 40 years


According to analysts, the beginning of this month was very negative for the US stock market. Leading US indices show the worst performance over the past 38 years. This leads to the conclusion that investors in the United States may be left without a Christmas rally.

US stock indices survived another busy week, completing its most failed since December 1980 result. For the first ten trading sessions in December, the indices slipped by almost 6%, which cannot but bother the experts. Recall, usually the last month of the year is accompanied by a take-off of quotes, the so-called "Christmas rally".

At the moment, the Dow Jones index has lost over 10% of its historical maximum, recorded in October 2018. Other major indices, the S & P 500 and Nasdaq, fell even more. In general, US stock indicators have gone into a minus since the beginning of this year, analysts say

The situation on the US market is extremely negative. Most investors see no point in buying. The decisive factors affecting the deterioration of the market situation were news about the slowdown of the Chinese economy and the growing trade conflict between the United States and China. The provisional truce between the parties did not improve the situation, experts emphasize.

The policy of world central banks also has a negative impact on the market. The US Federal Reserve periodically raises rates and withdraws liquidity, and the European Central Bank (ECB) is preparing to complete an asset purchase program. Experts believe that this will negatively affect investment prospects.

Most market participants are waiting for further action by the Fed. They believe that in 2020, the Fed will reduce the rate. However, many traders are guided by a significant change in the policy of the regulator. On Wednesday, December 19, all the attention of market participants will be directed to the Fed meeting, namely to the press conference of its head Jerome Powell. The result will be the publication of the macroeconomic forecasts of the regulator. Many experts hope that this will give a start to the Christmas rally.

The material has been provided by InstaForex Company -