Federal Reserve holds near 0% key rates, as expected.

Let’s explore the reason for near 0% interest rate by Federal Reserve.

Fed decided to hold key rates as near 0% to spur the economical growth in US.
It has been decided to keep these rates at historic low till the economy recover.
This will boost the financing to corporates as consumer are flushed with liquidity.
More positive for asset classes like equities and commodities.
Still market is waiting for $1 trillion package by US government to provide further liquidity.
Asian markets are trading mix this morning. (8.30 A.M)
SGX Nifty is in green note this morning. (8:30 A.M.)

Thursday rally is based upon historical decision to keep holding rates near 0% by Federal Reserve. This will provide impetus to the economy at large and support the riskier asset classes like equities. Since liquidity is the mother of rally in the stock markets.
The decision has come to support the ailing US economy from unemployment and slow GDP growth rate.
Still investors are awaiting for another major decision by US government to provide $1trillion to further boost the economical activities and spur growth.
If this package get through liquidity will further in the system that will fuel the growth of stock markets as well.
Do not short the market as positive news are getting discounted into the system.

Dow Jones Industrial Average rose by 160.29 points, or 0.61%, close at 26,539.57.
The S&P 500 surged by 40.00 points, or 1.24%, ends at 3,258.44.
Nasdaq Composite Index increased by 140.85 points, or 1.35%, close at 10,542.94.

Time of data collection: 8.30A.M

SGX Nifty is suggesting that Indian Markets will start at around 11250 level. Today strategy is to wait for dip at 11200 level and they buy Nifty future with a target 11300 level and stop loss 11050.

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Author: Akhil Mahajan, M.D. Mutual Fund Advisory, www.mutualfundadvisory.co.in2,537.76