The Fed proceeded with the first interest rate increase in the last three years, raising the cost of borrowing to 4%. Losses of 0.44% for the S&P500, falling to 7,552 points. The decision was expected, but not Wors' aggressive rhetoric that inflation is very high for a very long time, which means that one more increase is almost certain within 2026.
The "hawkish" policy of the Fed chief surprised the majority of analysts, with the decisions being taken unanimously by the board members. Trump's reaction was furious, calling for interest rates to be cut to 1%, while almost in parallel there was an increase in short positions in shares of companies affected by the high cost of money.
Higher at 17.71% is the VIX/CBOE, with an upward trend, the 10-year yield at 5.01%, the 30-year at 5.346%. At the same time Japan's 10-year at 2.992%, which due to the carry trade directly concerns the relationship with the corresponding US one, a relationship closely monitored by bond/debt traders.
At the same time, Saudi Arabia is activating alternative exports, with the immediate result being a decline in oil prices. Crude WTI at $102.32, Brent at $105.73.
The reaction of investors in the Asian markets, mainly on the Seoul stock exchange, was almost reflexive.
This is, in brief, the initial situation in the markets, but Wors' decision also has a second interpretation according to contrarian analysts, and it remains to be seen whether and how it will affect traders at a later stage. Wors was Trump's personal choice, which is why in a broad part of the community the assessment had formed that he would be more accommodating, and less independent. However, his rhetoric, clearly "hawkish" and completely contrary to Trump's wishes, sends the message that he will follow the policy he considers imperative for managing the situation.
It remains to be seen whether this very evident differentiation will work to the market's benefit. Obviously not immediately, today-tomorrow, but later on.
With this climate on Wall Street, and in the Asian markets, in Europe the shorts gain a strong advantage. All the more so as a new interest rate increase by the ECB before Christmas is also being priced in.
From 25,558.94 points for the DAX, from 8,140.59 for the CAC40, after yesterday's upward reaction. Earlier, the futures of both indices were negative.
From 316.82 after a rise of 0.42% the EuroStoxx Banks.
On Euronext Athens, from 2,698.76 points for the GD but with slippage from the day's high of 2,717.20 points.
A similar slope for the DTR as from 3,268.21 it was formed about 39 points lower, as was the case for the FTSE25 which from 6,980.88 was formed at 6,929.65 points. It is obvious that several investors took their profits and that others rearranged their positions. The nearly 100 million euros out of a total turnover of 421.4 million euros reinforces this approach. As do the transactions of 33.81 million in bank shares out of a total of 46.21 million, indicating that the largest part of the pricing-in of the rebalancing is concentrated in the banking sector.
The banking sector, as the leading sector, will be at the center today-tomorrow, with transactions unprecedented for the market's standards, at Friday's "close." Recalling that since yesterday, the duration of the session has been extended by 10', in order to facilitate trade clearing.
The climate in New York and the European stock markets seems to facilitate those who estimate that tomorrow's session will give them the opportunity to position themselves from lower price levels, tomorrow-Monday.
Whether they will be confirmed or not will depend on the relationship between sellers and buyers, that is, the outflows-inflows in shares included in the main indices, with bank shares having priority.