Wall Street Falls Following Morgan Stanley Accounts and Unemployment Data

Wall Street Falls Following Morgan Stanley

Wall Street falls moderately after knowing several economic indicators and the results of Morgan Stanley. Investors continue to value the numbers of the big banks and the words of Jerome Powell before Congress, although the indices remain very close to all-time highs, in what is being a week of transition.

The Fed president did not provide much news, although he reiterated his messages that there is still “a long way to go” to complete the recovery, so they will continue to support the economy with their monetary stimuli.

In addition, he promised that the Fed will give sufficient advance notice of any changes in its purchase programs. “We will give advance notice before announcing any decision to make changes to our purchases,” he said.

And regarding the notable increase in inflation, he explained that “it will probably remain high in the coming months before moderating“, although he again showed his tranquility on this matter “because long-term inflation expectations remain well-anchored.”

The leader will appear again this Thursday before the Senate Banking Committee.

J.P Morgan AM analysts expect that the Fed could announce the reduction (‘tapering’) of its asset purchase program by the end of the year if the US economy maintains the strength of its recovery, although it will not begin to apply it until 2022 and It won’t raise rates until 2023.

Today, economic data in China showed GDP growth of 1.3% in the second quarter (7.9% year-on-year) and a rise of 12.1% in June retail sales.

In the US, initial jobless claims have dropped to 360,000 and have marked a new post-pandemic low, in line with expectations. Additionally, the Philadelphia Fed manufacturing index declined in July to 21.9 from 30.7, above the expected drop to 28. Finally, industrial production was up 0.4%, down from 0, 7% anticipated.

COMPANIES AND OTHER MARKETS

In the results chapter, the main reference of the day has been the figures of Morgan Stanley, which has exceeded the forecasts with its quarterly figures but falls almost 1% (although it rises almost 35% in the year).

On the other hand, Netflix is planning an expansion to video games and has hired executives from Electronic Arts and Facebook to lead the project, according to Bloomberg.

And on a strategic level, Swiss bank UBS has raised its target for the S&P 500 by the end of the year to 4,500 points (its previous forecast was 4,400 points). “We believe the bull market remains on a solid footing, driven by huge consumer cash balances, growing business investment and a still accommodative Fed,” analysts said in a report.

In other markets, West Texas oil fell 1.46%, to 72.06 dollars, while the euro depreciated 0.14% and changed to 1.1818 dollars, while the ounce of gold rebounded 0.03 %, up to $1,825. Finally, the yield on the 10-year Treasury bond relaxes to 1.316% and bitcoin falls 2.87%, to $31,802.