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Sharp falls on Wall Street, with the Dow Jones signing its worst week since October

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Wall street has registered strong falls this Friday (Dow Jones: -1.58%; S&P 500: -1.31%; Nasdaq: -0.92%), with the Dow Jones posting its worst week since October. It has posted 3.1% losses since Friday of last week. These results contrast with those achieved this Thursday by the Nasdaq 100, which groups the 100 largest companies in the technology index, which marked a new all-time high.

The exchanges continue to analyze the messages released on Wednesday by the United States Federal Reserve (Fed). Central bank advanced the first rate hike to 2023, significantly raised its inflation forecasts for 2021 and its president, Jerome powell, confirmed that they had begun discussing the withdrawal of their asset purchase program, the famous'tapering '.

"The Fed may be a little anxious with its frame of reference for monetary policy ", affirm the managers of Amundi Asset Management." If the US labor market recovers more strongly in the coming months and inflation remains high, they may feel the need to speed up their tapering cycle", they add.

Jerome Powell acknowledged that " changes in demand can be large and rapid, and bottlenecks, hiring difficulties and other restrictions could continue to limit how quickly the bid can be adjusted, what increases the possibility that inflation will be higher and more persistent than we expect".

"The 'hawkers' ('hawks', who support a tougher monetary policy) clearly have more influence. It is important to note that the Fed is advancing its monetary tightening program by one year. If the US economy returns to its pre-crisis employment level in 2022, and if inflation 'advance' continues or even rises, the Fed could increase rates from 2022 "explains Christophe Morel, chief economist at Groupama AM.

It will be interesting to see how investors discount this readjustment of the monetary policy forecasts of the world's most powerful central bank. "We see that the Fed is no longer significantly lagging behind the curve and it reduces one of the main tail risks that concern investors ", affirm the managers of UBP.

"In particular, that of a persistent rise in inflation in the medium termas the Fed's guidance on rates indicates that they won't let inflation get out of control. In general, we see the message from the Fed as positiveas they become less 'dovish' (in favor of stimulus) due to the impressive prospects for economic growth, "they conclude.

Finally, Fidelity analysts comment that "it is probable that the Fed will begin to signal its plans to reduce stimuli. In this sense, the Jackson Hole Policy Symposium in August It's the next milestone that President Powell could use to do that. "

On the other hand, James bullard, president of the Federal Reserve Bank of St. Louis, has announced that they expected a growth in inflation, "but this has been greater than expected". And he added that the debate on 'tapering' "is open."

As for raw materials, this Thursday its prices plunged and gold led the declines. Despite rebounding early in the day, it depreciated again by 0.59% to $ 1,764.30.

COMPANIES AND OTHER MARKETS

At the business level, Goldman sachs has started negotiating with Galaxy Digital investing in bitcoin futures, as announced by CNBC. In this way it intends to expand the business offer in the 'cyptos' for its clients. The entity has fallen 3.5%.

Likewise, large banks such as Morgan Stanley, JP Morgan and Citigroup, which have posted losses of between 2% and 4% in the stock market, have warned that their trading income will suffer a strong year-on-year decline in the second quarter, especially in what affects the fixed income business.

In addition, they also noted that consumer credit is not performing as well as expected due to the high level of savings currently held by American families.

In other markets, oil West texas it rises 0.84% ​​to $ 71.64. The euro depreciates 0.34% and changes to $ 1.1865, while the profitability of the 10-year US bond relaxes to 1,445%. Finally, the bitcoin it falls 5.59% and changes to $ 35,641, falling below the $ 38,000 barrier.

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