IIFT Daily Note with Peter Brown

Sell the rumour,buy the fact!

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Well the Fed finally did it. A taper of 10bln, reducing the QE to 75 bln a month. The market did the usual. a big sell off followed by a big rally. The reality is the economy is strong enough for tapering to begin. That is good news in reality. Now that we have the speculation out of the way we will see how the market reacts over the next few sessions. Ther is now little in the way of a Santa Clause rally and I would expect stocks to rise into Year End.

Dollar also got a boost. Euro down below 1.3700  USD/JPY at 104 . I would expect the dollar to rally further. Being the Christmas period we will probably see some significant moves. Today may be a foot on the ball but expect the volatility to continue toward the Year end.

Levels today are:- Euro 1.3720  1.3620  S&P (MAR)  1812  1700  Wall St (DFB) 16200  16070

This is the last blog until January 2nd. Have a very Happy Christmas and a prosperous New Year.

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