2023-12-14 13:22:00 ET
Summary
- The Federal Reserve left its policy rate unchanged for a third time while suggesting that a round of rate cuts is on the table for 2024.
- Markets cheered as prices for both US stocks and bonds surged on Wednesday, Dec. 13.
- What is clear, at least in relative terms, is that market trends are still leaning into a positive bias.
A month ago the trend in global markets remained bullish despite the fallout from a correction that started mid-summer, based on several sets of ETF pairs. Following yesterday's upbeat Federal Reserve news, however, the upbeat outlook has strengthened.
The central bank left its policy rate unchanged for a third time while suggesting that a round of rate cuts is on the table for 2024. "While the weather is still cold outside, the Fed has suggested a potential thawing of frozen high interest rates over the next few months," says Rick Rieder, Chief Investment Officer of Global Fixed Income at BlackRock.
Markets cheered as prices for both US stocks and bonds surged on Wednesday, Dec. 13. In fact, a bullish trend has been visible all along via several ETF pairs that track various facets of global markets.
From a top-down perspective, consider the ratio for an aggressive global portfolio, iShares Core Aggressive Allocation ETF ( AOA ) vs. its conservative counterpart, iShares Core Conservative Allocation ETF ( AOK ). Although the trend wavered due to turbulence in 2023 and this year's summer/fall correction, the upside bias has persisted, suggesting that a risk-on signal remains intact for global asset allocation strategies.
Editor's Note: The summary bullets for this article were chosen by Seeking Alpha editors.
For further details see:
Risk-On Signal For Global Markets Strengthens After Fed News