Due to inflation, Wall Street closes the worst week since the beginning of the year - Financial Sector

Due to inflation, Wall Street closes the worst week since the beginning of the year – Financial Sector – Economy

Mitchell G. Patton4 years ago

Wall Street closed the worst week since the beginning of the year, with falls of around 3 percent in its main indicatorsafter receiving data on inflation that does not subside and that will potentially lead the US Federal Reserve to be more aggressive in raising interest rates.

The week, which has been shorter due to the Presidents’ Day holiday on Monday and therefore more volatile, leaves a cumulative fall of 3 percent in the Dow Jones Industrials; a 2.7 percent drop in the selective S&P 500; and a 3.3 percent loss on the Nasdaq index.

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Investors are betting on equity and government debt sales as latest economic data reveal more persistent inflation than expectedwhich suggests that the central bank has room for maneuver to support monetary policy.

Sales of new homes will increase in January.

The last of these data was published this Friday: the PCE price index, which measures personal consumption spending, increased 4.7 percent year-on-year in January and 0.6 percent from the previous month, above expectations.

Meanwhile, new home sales rise in January and, to the surprise of many, consumer confidence was revised up for February, marking its highest in 13 months.

The minutes of the last Fed meeting – in which rates were raised by 25 basis points – published this week indicated that several members were in favor of a 50 point hike, a support that some analysts predict will continue to grow in the agency. .

This Friday, for example, The president of the Boston branch of the central bank, Susan Collins, anticipated more work to bring inflation to the 2 percent target. not only through rate hikes but also by keeping rates high for an “extended” period of time.

The Texas barrel has barely increased by 0.2 percent.

Short-term Treasury yields, which reflect investor expectations for interest rates, soared on Friday to levels not seen since 2007, with the 2-year bond offering 4.82 percent, and that of 10 years, 3.97 percent.

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All sectors have ended the week lower, according to the analysis firm Fidelity, and the most affected have been those of non-essential goods and communications, with falls close to 5 percent, and energy and technology (4.5 percent and 3.85 percent, respectively).

At the corporate level, with the season of quarterly results giving its last throes, the figures of an important company, Berkshire Hathaway, and perhaps some lesson from its owner, are expected this Saturday. investment guru Warren Buffett, who usually accompanies them with a letter.

In the oil market, the Texas barrel has barely risen by 0.2 percent after a volatile week marked by this uncertainty regarding the Fed, which reinforces the value of the dollar against other currencies, and by the ramifications of the War in Ukraine, which has been going on for a year now.

EFE