Wall Street registers mixed sign with Fed meeting as a backdrop

Wall Street

Investors look for clues to a possible change in monetary policy bias.

Wall Street registered mixed sign on Monday with the Nasdaq 100 touching its all-time highs. It is very close to pulverizing the record achieved on April 29, when it reached 14,073.48 points. The S&P 500 heads into the day after breaking its highest mark last week. It could pulverize them. Although weekly gains were very slight (more important on the Nasdaq), US equities remain at record levels. For the moment, the rise in inflation registered in April and May has not caused a notable correction in the market, despite the fears of some analysts about the evolution of prices.

In this sense, the main reference of the week will be the meeting of the Federal Reserve (Fed), whose conclusions will be presented this Wednesday. The event is important for several reasons, but above all to know what the central bank’s position is on the rise in inflation in the US.

Investors especially want to know if the Fed is officially going to start considering a change in its monetary policy bias. Some experts anticipate that it can send a message in this regard, although most anticipate that the Fed will wait for the Jackson Hole Economic Symposium, which takes place in August, as the key date for a message change to take place.

In any case, both the statement of the monetary body, as well as the new economic forecasts and the press conference of its president, Jerome Powell, will be key to the direction of the stock markets in the coming weeks.

In addition, retail sales for May and industrial production for the same month (both on Tuesday) will be other appointments marked in red on the US agenda.

In business terms, Oracle (Tuesday) and Adobe (Thursday) will announce the evolution of their accounting figures.

Likewise, IAG loses 1% after accusing Johnson about the uncertainty created in the sector due to the possibility that the United Kingdom delays the lifting of restrictions by the Covid.

At the other extreme, Novavax stands out above 5% after announcing that its vaccine is 90.4% effective. The study of 29,960 patients has revealed that the vaccine provides 100% protection against moderate and severe disease, reports MarketWatch.

In other markets, West Texas oil rose 0.87% to $ 71.53; and marks annual highs. The euro appreciates 0.14% and changes to 1.2123 dollars, while the ounce of gold falls 1.53%, to 1,850 dollars. And the profitability of a 10-year American bond falls slightly to 1.472%.

The tranquility in the debt market is one of the factors that have allowed the stock markets to endure in the zone of maximums. Especially the Nasdaq technology index, which has recovered ground in recent weeks against the Dow Jones and the S&P 500.

Last week, US inflation rebounded to 5% year-on-year. “However, it appears that both market expectations (breakeven points) and inflation expectations measured by surveys are declining despite the higher headline CPI,” say experts at Danske Bank.

“On Friday, the University of Michigan 5-10 year inflation expectations among households fell from 3% in May to 2.8% in June. In the market, 10-year equilibrium rates have fallen from 2 45% two weeks ago to 2.34% today, “they add.

At the geopolitical level, the G7 meeting held this weekend has been settled with important agreements such as the donation of 1 billion vaccines to the poorest countries, a project for a minimum business tax of 15% at the global level and a new route infrastructure to compete with China.

In addition, the most powerful countries in the world gathered at the G7 summit have sent a message to the Chinese Government and the rest of the ‘autocratic’ countries to defend democracy and human rights. China has already answered that the time when a few countries ruled the world is over; and that it will not tolerate directives from other nations in its internal politics.

Finally, bitcoin advances 7.78%, to $ 40,459, after Elon Musk commented that Tesla will accept the cryptocurrency again when the miners who generate it demonstrate that they work with renewable energy.