Analysis

	Special Edition. Market Summary.

As a result the pound increased from 1.9336 to 1.9650 and Euro – from 1.4363 to 1.4688. The trend however did not continue. The dollar stopped falling against the European currencies and is slowly decreasing only against the Japanese yen and the Canadian dollar.
It is obvious that the FRB resolution was forced and meant to prevent an economic recession, encouraging investors and preventing a new liquidity crisis.  The massive fall of stocks in the whole world was prevented.  But for how long? There is no clear answer to this question. 
This is especially noticeable in the Russian stock market. The RTS Index fell to the level of mid-August last year – 1,883 points. At that time the first stage of the credit crisis was at its height.  Just after the news announcement, the shares rapidly increased and the RTS today has been traded at over 2,000 points. Sellers, however, do not give up. There are enough of them in the market and major sales are coming from abroad. The RTS index again fell to 1,950 points.  Market volatility is extreme. Variations for some shares are over 30%.
For instance, Gazpromneft stocks at the opening of the yesterday’s session fell with a gap from 130 rubles and reached the price of 95 rubles, but in two hours the price raised again to 130 rubles.
Rostelecom shares have retained the important level of 250 rubles and are now being traded at 274 rubles. But trading for preferred stocks had to be stopped yesterday. Since the opening they fell by 20%. Soon the rates were restored and are now at the level of 56 rubles.
The price of Brent oil due to an expected decrease in demand dropped to 85 dollars per barrel.
Gold was trending lower to 850 dollars per troy ounce and then increased to 895 dollars per ounce.
There are reasons to believe that the FRB decision was panic-driven, brought about by the gradual loss of control. 
Moreover, the consequences of this decision may differ from the expectations of the American authorities. The loss of investors trust may result in unstable growth of the stock markets, changed by the range trading. And this is the best scenario. More likely it will result in the market stagnation.  In fact this scenario started at the end of last year.
The market is expecting further weakening of the FRB monetary policy. The reduction of rates at the meeting on January 29th – 30th may be higher than the traditional 25 basic points. In this case inflation will make a statement already in the first quarter of the current year. But the ability of Americans to manipulate the data is widely known, so we shouldn’t expect adequate economic statistics. 
In case the FRB continues the further reduction of rates, the market participants will still be disappointed. To cut a long story short, a stable stock market growth is not expected in the near future.  Certain purchase waves already happen, for instance, in Korea, where the Hang Seng index increased by 10%, but the investors uncertainty leads to volatility but not the rates growth in the long-term perspective.