Home Business Wall Street up, Fed tapering acceleration challenge. Oil sprint, WTI and Brent rally + 3%

Wall Street up, Fed tapering acceleration challenge. Oil sprint, WTI and Brent rally + 3%

by admin

Wall Street is pointing up, despite the decidedly more hawkish tones that came yesterday from Federal Reserve number one, Jerome Powell.

At about 3.40 pm Italian time, the Dow Jones rises by over 220 points (+ 0.66%), to 34,711 points; the S&P 500 advanced 0.98% to 4,612 points, while the Nasdaq made + 1.19% to 15,722 points.

In his hearing at the Banking Commission of the American Senate, Powell displaced the markets which, with the news of the new South African variant of Covid-19, Omicron, were already wondering about the risk of a new slowdown in the global economy and therefore about an attitude more dovish by central banks, including the Fed.

“The (US) economy is very strong and inflationary pressures are higher – said Powell – so it is appropriate in my opinion to consider the option of concluding the tapering of our asset purchases, which we announced at the November meeting. , maybe a few months earlier “.

At the next meeting scheduled for December 14 and 15, the Fed should therefore discuss the possibility of cutting monthly bond purchases by a figure higher than that currently decided, equal to $ 15 billion per month.

Wall Street didn’t take it well.

The Dow Jones closed down 652.22 points to 34,483.72 points; the S&P 500 fell 1.9% to 4,567, while the Nasdaq Composite dropped 1.55% to 15,537.69, also paying off concerns over the Omicron variant.

But equity markets appear to have digested the Powell surprise now and futures are pointing up.

Treasury rates are priced at a more restrictive monetary policy by the Fed: 10-year rates are advancing, even if they have retraced in the last few hours from the re-grabbed threshold of 1.5%.

Among the headlines, Merck did well after its anti-Covid pill received the OK from the FDA.

Energy stocks, such as Occidental Petroleum, are also growing, benefiting from the surge in oil prices.

WTI oil contract futures are flying over 3.6% to $ 68.59, pending the OPEC + meeting, scheduled for tomorrow. Brent + 3.5% to $ 71.67 a barrel.

Stocks related to the reopening of the economy also rebounded, despite fears over the Omicron variant, such as Carnival, Wynn Resorts and Hilton Worldwide.

The publication of the ADP report on the creation of new jobs in the private sector in the United States is in the spotlight. The report found that 534,000 new jobs were created in November, better than analysts’ estimated growth of +506,000. In particular, the entertainment and hotel sector saw an increase in payrolls of 136,000 units, as part of the 424,000 new jobs created in the services sector.

Although better than expected, the figure slowed the pace compared to the growth in October, equal to +570,000 units, which was revised down by 1000 units compared to the number initially disclosed.

Great expectations for the release of the US employment report for November, which will be published the day after tomorrow, on Friday: the expectations of the analysts interviewed by Dow Jones are for an increase of 573,000 new jobs, after +531,000 in October. The US unemployment rate is expected to decline to 4.5%.

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