Equity index futures are slumping Friday as investors digest the impact of emergency rescue measures by emerging market central banks whose priority it is to alleviate pressures on domestic currencies.
The market has continued to consolidate higher this morning as it searches to test resistance at 1780-82.25. Yesterday's close was 1771.25, the market must hold this level and truly close above the pivot at 1775.75-1776.25 to keep sentiment positive.
In the petroleum markets it was better than expected demand for products due in part to weather but also a surprising increase in gasoline demand that kept the market from falling apart after a much larger than expected increase in crude supply.
U.S. stocks fell, with the Standard & Poor’s 500 Index headed for a one-month low, while Treasuries and the yen gained as the Federal Reserve said it would make further reductions in economic stimulus and as emerging-market currencies weakened. Gold and natural gas climbed.
With South Africa and Turkey raising rates to support their currencies, as well as a possible second taper announcement occurring today from the U.S. FOMC, stock markets could be retreating because of these interest rate moves.
By December, the most recent month for which statistics are available, the U.S. dollar Fiat Money Quantity (FMQ) had grown to $12.48 trillion. This is $5.05 trillion more than if it had grown in line with the established average monthly growth rate from 1960 to the month before the Lehman Crisis.