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Strong increases on Wall Street after Powell's promises and the hope of a vaccine



Wall street has registered very strong increases (Dow Jones: + 3.85%; S&P 500: + 3.15%; Nasdaq: + 2.44%) after last week's falls and after comments by the Fed chairman, Jerome Powell, who has anticipated a historical quarterly contraction of GDP, but has ruled out a Great Economic Depression similar to that of 1929. The positive results of Modern in their potential vaccine against the virus they have also contributed to optimism.

The US economy could contract "in the order of 20% to 30%" in the second quarter, but it will prevent an economic downturn similar to the Great Depression in the long term, Powell said in an interview this Sunday on CBS.

The Fed President, aware that scared markets last week with overly realistic speech, has offered a more positive message and has given wings to the bags after affirming that the central bank will take all the necessary measures "and will do everything possible" to drive recovery. "There is no limit to the programs and actions that we can carry out", Powell has promised.

"We can start new loan programs if necessary. There are things we can do in monetary policy. There are several dimensions that we can move forward to make the policy even more accommodative. Through advanced guidance, we can change our asset purchase strategy. There are many things we can do", has added.

At the business level, Modern It has been the other great protagonist of the day. Their titers have soared 20% after their "positive" advances in phase 1 of the study to find a coronavirus vaccine. In addition, the retailer JC Penney It is down 23% after filing for bankruptcy.

Although the main driver of progress has been the Oil and Gas, which has rebounded 10% thanks to the rise in crude oil, since the West Texas oil It has rebounded 11%, to $ 32.65, in the hope of a reactivation of demand.

Besides, the ounce of gold It has fallen 1.4%, to $ 1,731, while the euro it appreciated 0.95% and changed to $ 1.0918, after France and Germany announce a € 500 billion fund in subsidies for the countries hardest hit by the coronavirus. Finally, the profitability of 10-year American bond It has rebounded to 0.72%.

On the geopolitical scene, the Trump administration has intensified its campaign blaming China for deadly coronavirus pandemic. The commercial advisor Peter Navarro He has stated that "the Chinese, behind the WHO shield, for two months hid the virus from the world and then sent hundreds of thousands of Chinese by plane to Milan, New York and around the world to plant it."

On a technical level, the S&P 500 has significant resistance in the "weekly bearish gap of 2,972 points", an area that has been acting as resistance since the April highs. The main world indicator has closed at 2,953 points. Clearly exceeding 3,000 points would open the way to once again seek its historical maximum for February, in 3,393.50 points.

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