Wall Street uncertain: the Dow Jones is practically flat, with a variation equal to -0.07% at 34,472 points; the Nasdaq rises 0.12% to 14,500 points, while the S&P 500 drops 0.08% to 4,359.
The focus of investors is on the World Economic Outlok in October published today by the International Monetary Fund: the report showed that the IMF has slightly lowered its outlook on global gross domestic product growth from + 6% expected in July to + 5.9%.
For 2022, the IMF confirmed the growth estimate at the rate of 4.9%.
The Washington institution motivated the 2021 downgrade with the bottlenecks in supply chains that are manifesting in advanced economies and with the worsening of the health situation (Covid-19 pandemic) in emerging economies.
“The global recovery continues – is the title of the WEO – but the momentum has weakened and the uncertainty has grown”.
The IMF has cut the outlook, in particular, relating to the US GDP of 2021, by 1 percentage point to + 6%, and has also issued a warning to the Federal Reserve of Jerome Powell.
“We are seeing major bottlenecks in supply chains around the world, which are also fueling inflationary pressures, which are particularly high; financial risk-taking is also rising, which represents an additional risk to the outlook.” commented IMF economist Gita Gopinath.
The IMF consequently urged central banks such as the Fed to prepare to launch monetary tightenings, should inflation become too high.
The anticipation is high for the quarterly earnings season, which kicks off on Wall Street this week.
On the calendar are the earnings of JP Morgan and the other large US banks, which will publish the financial results for the third quarter of the year.
Refinitiv estimates show that Corporate America’s earnings growth is expected at an annual rate of 30%, a marked slowdown compared to the boom of 96.3% in the second quarter.
At the same time, notes Rod von Lipsey, managing director of UBS Private Wealth Management, the very fact that “third quarter earnings expectations have been revised downwards in recent weeks should fuel upward surprises, which is a positive factor for the general market sentiment “.
Yesterday the Dow Jones Industrial Average closed down 250.19 points, or -0.7%, at 34,496.06, after rising to its intraday high of more than 200 points; the S&P 500 also fell 0.7% to 4,361.19, the Nasdaq Composite fell -0.6% to 14,486.20 points.
10-year Treasury rates are down to 1.586%.