"As markets head towards Black Friday, the mood among investors echoes the gloom from which the shopping holiday derives its namesake. Markets across Europe, the U.S. and Asia have all hit snags this week, and the VIX volatility index also soaring. The negative sentiment isn't particularly down to one fact or another, said Macquarie's Thierry Wizman in a note to clients this week. Rather, it's a "deadly confluence" of bad news-or rather, news that investors would rather not see."
"at the current level. This will have ramifications of its own: Consumers won't get a final burst of relief in the run-up to the Christmas shopping period, and businesses won't get the cheaper borrowing costs to motivate them to start new investing. There's also the minor fact that a hold will likely infuriate the White House, potentially reigniting tensions over the Fed's independence."
Global markets have weakened across Europe, the U.S. and Asia, with the VIX volatility index rising and investor mood sagging ahead of Black Friday. A combination of factors is depressing sentiment: expectations for a December US rate cut have collapsed as FOMC members adopted a hawkish tone and federal data gaps persisted during the shutdown, sending the implied probability from 94% to 47% per CME's FedWatch. The likely hold on rates threatens consumer relief and business investment, risks White House frustration, and coincides with slowing growth in the U.K., E.U., China and Japan and impending fiscal and political uncertainty.
Read at Fortune
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