Fed's Surprise Rate Cut Resuscitates Canadian Stocks
Canadian stocks closed solidly higher after the Fed surprised the market with a 50bp cut in Fed Funds rate and a 25bp cut in discount rate. Many had expected an intra-meeting move, but not at this time and of this magnitude. Industrial Products led the way higher, followed by Utilities and Financial Services. S&P believes the move is largely political and meant to reassure the incoming U.S. Administration that the Fed is vigilant. GoCs lower in profit taking along with Treasuries. GoCs, which had moved higher in anticipation of rate cut, lower in profit taking.
European markets closed mixed. The London Financial Times-Stock Exchange 100 index was off 134.80 points, or 2.18%, at 6,039.90. In Germany, the DAX index, meanwhile, was up 149.03 points, or 2.37%, to 6,438.85 after a survey showed economists believe German manufacturing orders fell 0.3% in November. German DIW research unit says European Central Bank has wasted chances to stimulate faster EuroZone growth. France's CAC 40 was down 114.85 points, or 1.98%, at 5,684.05.
Japan's stock market was closed. Hong Kong's Hang Seng index, meanwhile, ended off 280.36 points, or 1.89 percent, at 14,589.58.