Wall Street closed the worst week since the beginning of the year, with falls of around 3% in its main indicators, after receiving data on inflation that does not subside and that will potentially lead the US Federal Reserve. to be more aggressive in rising interest rates.
The week, which has been shorter due to the Presidents’ Day holiday on Monday and therefore more volatile, leaves an accumulated fall of 3% in the Dow Jones Industrials; a 2.7% drop in the selective S&P 500; and a 3.3% loss on the Nasdaq index.
Investors are betting on equities and government debt sales as the latest economic data reveals more persistent than expected inflation and a resilient economy, suggesting the central bank has room to tighten monetary policy.
The last of these data was published this Friday: the PCE price index, which measures personal consumption spending, increased by 4.7% year-on-year in January and 0.6% compared to the previous month, above expectations.
Meanwhile, new home sales increased 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% target not only through raising rates but also by keeping them high for a period of “broad” time.
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%, and that of 10 years, 3.97%.
All sectors have ended the week with a decline, according to the analysis firm Fidelity, and the most affected have been those of non-essential goods and communications, with falls of close to 5%, and those of energy and technology (4.5% and 3.85%, respectively).
At the corporate level, with the season of quarterly results giving its last throes, the figures of an important company, Berkshire Hathaway, are expected this Saturday, and perhaps some lesson from its owner, the investment guru Warren Buffett, who usually accompanies them with a letter .
In the oil market, the Texas barrel has barely risen by 0.2% 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 lasted for a year.
With information from EFE / Photo: EFE / JAC
