Markets plunge after disappointing Fed.

28/01/2021

On Wednesday, equity markets dived with the Nasdaq 100 index plunging 4% as traders were disappointed by the latest Fed's decision.

Even though the central bank refrained from mentioning tapering or rate hikes, markets plunged. It seems the Fed is committed to keeping the rates and the current QE pace unchanged for a longer period of time. 

Nevertheless, markets are addicted to Fed's liquidity, and there was a clear disappointment as the Fed failed to provide more liquidity, so stocks were sold-off, along with gold. 

The US Securities and Exchange Commission said late Wednesday it was "aware of and actively monitoring" ongoing market volatility in options and equities markets. At the same time, Reddit briefly restricted access to its popular WallStreetBets chatroom.

Apparently, when small guys make money, it is not good for market integrity, but when large guys make millions and billions, everything is ok. 

Later in the day, the fourth quarter's US GDP is due and should come out at 3.9%, down from 33.4% in the third quarter. Jobless claims and new home sales data will also be released. 
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