Gains on Wall Street after Powell’s ‘disinflation’ remarks.
Wall Street closed Tuesday with notable gains (Dow Jones: +0.78%; S&P500: +1.29%; Nasdaq: +1.90%.) after the losses of the last two sessions. The market reacted to the speech delivered by the President of the European Commission Speech by Federal Reserve (Fed) Jerome Powell.who stressed the need for further interest rate hikes, even though he spoke of the beginning of “disinflation”, and after his speech, the main indices turned green.
POWELL’S INTERVENTION
This Tuesday, he spoke again Jerome PowellFed Chairman Jerome Powell following the U.S. central bank’s latest policy meeting during an economics briefing at the Fed’s annual meeting in Washington, DC. Economic Club of Washington, and reiterated that “further rate hikes will be necessary” until a sufficiently restrictive level is reached.
On return to price stabilitypointed out that “significant declines in inflation” are expected this year.but only in 2024 will price increases approach the 2% target, a target on which Mr Powell has ruled out any change.
Powell showed the scenario the Federal Reserve is working with, which is based on the assumption that ” it will take some time to get inflation under control and further rate hikes will be needed.“.
Previously, other members of the Fed had also spoken out, such as. Raphael Bosticof the Atlanta Fed, who pointed out that January’s strong jobs report hints at the possibility of further rate hikes..
For his part, the president of the Minneapolis Fed, Neel Kashkarisaid that “we have to raise rates aggressively to cap inflation, then we have to raise rates aggressively to cap inflation, then we have to raise rates aggressively to cap inflation.”EU monetary policy must find its way into the economy.“.
COMPANIES: STRONG GROWTH FOR BAIDU
At the enterprise level, the significant gains stand out for. Baidu (+15%) after the company that owns China’s most popular search engine announced that it would launch its own artificial intelligence (AI) chatbot.
Among the companies that have published their results, those of the video game maker stand out. Activision Blizzard and the car rental company Hertz.
AUSTRAL’S RBA INTEREST RATE INCREASE AND WAITING FOR OTHER INCREASES FOR INTEREST RATE INCREASE
The website Reserve Bank of Australia (RBA) raised interest rates to 3.35% 3.10%, in line with forecasts.
The agency has been conservative in its estimates and it also “expects that further interest rate increases will be needed coming months, to ensure that inflation returns to target and that this period of high inflation is only temporary.
In determining “by how much further interest rates need to rise, the RBA will pay close attention to the evolving economic and financial situation in the region. the evolution of the world economytrends in the household expenditure and the inflation outlook and some labor market“, explained the organization.
TECHNICAL ANALYSIS AND OTHER MARKETS
From a technical point of view, the correction of the indices is quite normal after the strong gains accumulated during the first weeks of the year, in particular by the technology.
The market was heavily overbought, and S&P500 had overcome a major resistance, his Average of 200 sessions. Therefore, a correction of the levels of 4,000 stitches would be completely normal after the previous strong bullish rally.
“We won’t see any signs of weakness as long as it remains above the benchmark. 4,000 stitchesprice where the Average of 200 sessions“, explains César Nuez, analyst at Bolsamanía.
In other markets, the West Texas Crude Oil rebounded 4.32% ($77.32) and the Brent rebounded 3.54% ($81.79). On the other hand, the euro depreciated by 0.06% ($1.0723), and the ounce of gold is up 0.16% ($1,882). Furthermore, the U.S. 10-Year Bond Yield rose to 3.69% and the bitcoin gained 0.98% ($23,229).
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