Very volatile this Friday, Wall Street managed to close scattered but close to balance, although it lost again during the week. This increasingly reinforces the idea that investors are between fear and uncertainty about what might happen.
The Dow Jones index rescued a marginal 0.03% to 31,261.24 points after spending most of the day in the red, in a market worried about inflation and its effect on companies’ profit margins.
The technological Nasdaq, for its part, limited its losses to 0.30% to finish at 11,354.62 points, after losing almost 3% during the session.
In turn, the S&P 500 closed stable (+0.01%) at 3,901.36 points. During the day, he lost more than 20% from his maximum at the beginning of 2022, thus reaching the “bear market” or bear market zone.
According to analysts, the recent announcements by the Federal Reserve on the economic future of the United States have the New York Stock Exchange in check, since it did not completely close down the possibility of an eventual increase in interest rates.
The US Federal Reserve (Fed, central bank) wants economic growth to moderate and to have “clear” evidence that inflation is coming down, before giving up its efforts to stop the activity, said the president of the organization, Jerome Powell, this Tuesday.
“What we need is to see growth come down from the very high levels we saw last year, come down to a still positive level” but allow supply chains to keep up with demand, he told an event in the daily. The Wall Street Journal.
The Fed proceeded this month to the biggest increase in reference interest rates since 2000 – half a percentage point after a quarter of a point in March – to combat the highest inflation in 40 years in the United States.
Markets in Europe breathe easy
European stock markets closed higher on Friday, but were unable, however, to recover the losses recorded during the week due to economic and geopolitical risks.
Frankfurt’s Dax Index gained 0.72% and London’s FTSE 100 1.19%. The CAC 40 advanced less, by 0.20%, due to declines in values in the luxury sector. The Ibex 35 of Madrid rose 0.90% and the FTSE MIB of Milan 0.12%.
Friday’s gains, after two days of significant declines, were attributed by investors to China’s rate cut, to try to boost the world’s second-largest economy hit by restrictions imposed due to covid-19 outbreaks. .
It was also a bad day for the dollar
Like Wall Street, what is happening in the world also affects the price of the dollar, that in the case of Colombia it has collapsed more than 100 pesos in less than a week.
According to the Colombian Stock Exchange (BVC), the last trading price of this currency in the country, today, Friday, May 20, was 3,972 pesos. This value is 82 pesos less than that reached at the close of yesterday, Thursday 19, and 138 pesos less than eight days ago, May 13. This, without a doubt, marks a sharp drop in a week.
However, Despite the fact that all the results at the moment are negative, the expectations of experts and investors continue to be on the rise, hoping for the normalization of the monetary policy advanced by the main central banks of the world, especially the Federal Reserve of the United States.