Central Banks Decision Time: Stocks Sliding

Central banks around the world have faced major decisions this year, and this week. From New Zealand to Korea to Switzerland and the United States, central banks are reacting to a global economy is change, and their decision efforts have some stocks sliding in response.

In New Zealand, central banks decided to cut interest rates and in response its, “dollar rose against all but one of its major peers after the nation’s central banks signaled today’s rate cut should be enough to return inflation to target. The RBNZ lowered the official cash rate a quarter percentage point to 2.5 percent, the fourth reduction this year. Any more cuts risk further igniting Auckland’s property boom…The New Zealand dollar is the best performing major currency this quarter against the U.S. dollar, rising 5 percent. ”

Meanwhile, central banks in Korea and Switzerland decided to keep rates are record lows. The decision was echoed in the United Kingdom, where central banks held, “borrowing costs at a record low 0.5 percent. Emerging-markets equities are sinking for a seventh day, the longest losing stretch since August, as the prospect of a U.S. interest rate hike next week lessens the appeal of riskier assets.” European stocks are slipping, “for the seventh session in eight.”

Meanwhile, central banks back at home in the United States will have a lot to consider for their upcoming interest rate decision. Brent crude oil, a benchmark market indicator, “is rising for the first time in five days. Its four-day slump came after OPEC effectively abandoned its output target on Friday. U.S. stockpiles dropped for the first time in 11 weeks, falling the most since December 2012, as refiners drain tanks to cut their tax burden, which is determined by year-end levels.”

As central banks around the globe ponder their economic outlook and fiscal future, stock markets and investors alike are jumpy in anticipation. Similar to the Fed’s decision earlier this year, predictions are running rampant and speculation is ubiquitous. Our team at Apex Financial Advisors knows that investors frequently feel the stress of big financial decisions—and the stock market reaction too. Our team always reminds clients that financial decisions should be made sans emotion, despite the legitimate levels of stress. If you want to discuss your portfolio, or plan for any big financial decisions, talking to an expert at Apex Financial Advisors can help you develop a sound plan for your fiscal future. Central banks around the world will continue to make big decisions, make sure you make some big decisions for your own portfolio with help from Apex Financial Advisors.

Source:
http://www.bloomberg.com/news/articles/2015-12-10/charting-the-markets-stocks-sliding-as-central-banks-decide