US markets look set to open marginally lower today following the surprise comments from Fed Chair Yellen that the Federal Reserve may raise US interest rates as early as spring 2015. Futures suggest S&P500 will open 8 points higher at 1852 with the Dow Jones expected to open 64 points lower at 16,158. As the FOMC press conference progressed yesterday, the Dow Jones industrial average and gold prices dropped while US 10 year yields and the US dollar rallied. It’s doubtful that the Chair’s comments were intended to be such a blow to global stocks but the statement that rates may be raised "something on the order of around six months" after the end of QE is a fairly explicit statement. One has to believe she meant it. That said the markets will be listening intently to Yellen’s next public appearance. Stocks could look very favourably on any attempt to retract those words. Markets were in their “happy place” with the best of both worlds; improving US economic growth and on-going monetary quantitative easing. Now they have to contend with recently deteriorating growth in the US and reduction of monetary easing, quicker than previously anticipated. In December, the Dow Jones jumped almost 300 points on the announcement of tapering because it came alongside the Fed stating interest rates would stay low “well after” the unemployment rate fell to 6.5%. Come January amidst emerging market turmoil and a poor December US jobs report, the announcement of the next round of tapering knocked the Dow down 200 points. Now with the February US jobs report above expectations, the Dow again fell over 200 points as tapering was announced in March. It’s becoming increasingly clear that US stocks value monetary easing much more than improving US economic growth. Lurking beneath this belief, there could well be the thought that US economic growth is not self-sustaining and won’t be kept alive without the stimulus currently being tapered. Adding to market concerns, the Chinese Yuan dropped below the key 6.20 level overnight, down 0.8% this week. The drop is the result of a concerted effort by the Chinese government to curb credit excess in the shadow banking sector. While this is sensible to slow the country’s housing bubble, the risk is that the bubble pops with wide-ranging implications for the world economy. On the data front for today’s US session there are existing home sales, expected to improve slightly to 4.65M with the Philly Fed manufacturing index expected to improve to 4.2. Nike (NKE) release earnings today, with an expected EPS of $0.72 on revenue of $6.69 billion in the third quarter. Nike is now has an almost unparalleled brand amongst athletic brands and has a history of innovative products that has made it the leading stock in the DJIA. Markets are anticipating a lower growth forecast from the company amidst a slow-down in emerging markets. With Nike being the best Dow performer in the recent bull market, it will have the most to lose if stocks continue their slide after the FOMC yesterday. CMC Markets is an execution only provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.