Wall Street is preparing to end the month of August with the plus sign and at new record levels. Record levels that, at an intraday level, the S&P 500 index also touches today, after the closing high recorded last Friday together with the Nasdaq Composite.
Today and tomorrow will be the last two trading days of the month and, so far, the S&P 500 has risen 2.6%, the Dow Jones and Nasdaq Composite have grossed 1.5% and 3.1% respectively.
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Last week was also positive for the indices: the Dow Jones gained 0.9%, the S&P 500 rose + 1.5% and the Nasdaq Composite + 2.8%. In particular, the S&P 500 and the Nasdaq tested new closing highs.
Today, at about 4 pm Italian time, the Dow Jones is negative, with a loss of 0.12% to 35,414 points; the Nasdaq rose by 0.47% to about 15,200 points, while the S&P 500 advanced by 0.25% to 4,521 points.
On Wall Street, the dovish tones of the speech that Fed number one Jerome Powell delivered at the Jackson Hole symposium last Friday had a positive impact.
As expected by several analysts, Powell spoke precisely of Covid, to be precise as a Delta variant, indicating on the one hand that the tapering of the Quantitative easing plan (with which the Fed buys assets for $ 120 billion a month) will take place by the end of this year, and emphasizing on the other hand the importance of the Fed not making a move at the wrong time in responding to temporary changes in the economy, such as those unfolding this year.
“At the recent July meeting of the FOMC (the monetary policy arm of the Fed) I was of the opinion, as did most of the participants that, if the economy had grown as broadly as we had anticipated, it would then be appropriate to start reducing the pace of asset purchases (QE) this year, Powell said. The following month confirmed the greater progress that has been made (by the economy), as demonstrated by the solid July employment report. ”
In any case, although inflation justifies the start of tapering “by the end of the year”, for Powell “there is still a long way to go to reach maximum employment”, another sine qua non for raising rates. , which were cut by the Fed in the range of zero to 0.25% in response to the outbreak of the Covid-19 pandemic last year.
Based on what Powell said, analysts believe that, at this point, an official announcement of the QE tapering could come as early as the next meeting of the FOMC, the monetary policy arm of the Fed, scheduled for the next 21 and September 22.
A crucial indication will come next Friday, when the US government releases the August employment report: the economists interviewed by Dow Jones forecast a growth in jobs equal to +750,000 units, against an unemployment rate falling to 5, 2%.