Wall street still sweet with the Nasdaq and S&P 500 closing with new highs this Wednesday supported, again, in the hopes of a fiscal stimulus, and after the statement of the Federal Reserve (Fed) after their meeting on the types. The US central bank has kept its asset purchase program unchanged, in line with forecasts, adding that it will continue until "until substantial economic progress".
The Fed has kept its commitment to buy $ 120 billion a month in assets until I appreciate that they have been made "substantial progress" towards its goals of full employment and price stability.
Purchases will consist of 80,000 million per month in government bonds and 40,000 million in mortgage securitizations. "These asset purchases help promote the agile functioning of the market and accommodative financial conditions, thus supporting the flow of credit to households and businesses," the Fed said.
For his part, the president of the organization, Jerome Powell, has made his strongest request to Congress to approve "already" a new package of fiscal and economic stimuli. "Tax aid is already needed because the next few months are going to be the hardest. With the arrival of the vaccine, we expect the economy to recover very strongly in the second half and for people to return to work. "
NEGOTIATIONS CONTINUE IN WASHINGTON
The possibility of Republicans and Democrats reaching an agreement on the new aid package continues to attract investors' attention. This Tuesday the president of the House of Representatives, Nancy pelosi, Senate Majority Leader Mitch McConnell, Senate Minority Leader Chuck Schumer, and House Minority Leader Kevin McCarthy met to advance talks, and the feelings are good.
"I am optimistic and believe that we will be able to complete an understanding at some point, and soon"McConnell said after the game was over.
For his part, Schumer assured that both Republicans and Democrats are "making progress, and I hope we can reach an agreement soon."
However, the gains on Wall Street are somewhat contained after the data of the November retail sales. According to the Commerce Department, there has been a steeper drop than expected, as US retail sales fell 1.1% in the eleventh month of the year, when the consensus of analysts expected it to be only 0 ,3%.
The experts of Pantheon Macroeconomics they warn that "the holiday season is not over, and December could see a strong rebound in retail sales, although the growing restrictions due to Covid make it less likely. "In addition, they affirm that" the weakness in sales is not due to a lack of resources, "and that households are not being limited by the lack of money in cash, but to the situation due to the pandemic.
"This data is weaker than expected, so downward revisions to fourth-quarter growth are to be expected. And the risk of a total contraction of GDP in the first quarter is increasing", they point out.
For its part, from Oxford Economics they are concerned. "Retail sales are still 3.6% above their pre-crisis level, but the fragility of consumers during the holiday season is concerning." And it is that they are affected by the new wave of Covid-19, which has led to widespread hospitalizations and deaths throughout the country.
"The resurgence of fear of the virus and stricter social distancing rules" are taking their toll, and it is that "with decreased mobility, reduced employment and faltering demand, the holiday season could get pretty miserable"for the US economy.
In turn, the US PMI indicators showed some expansion in December, "but softer" than that registered in the previous month.
On the other side of the Atlantic, the stock markets trade with a mixed sign. In the Old Continent, the Ibex 35 and the CAC are listed in red, while FTSE and Dax opt for green. The good data on the European economy that have been known do not serve for Europe to opt en bloc for green. And it is that what the Fed says today worries, and a lot, to investors.
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