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Wall Street: The minutes of the Fed “dressed” their indicators in red

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Wall Street: Τα πρακτικ της Fed «eντυσαν» στα κoκκινα τους δεΙκτες

Investors reacted negatively to the Fed's signal of further rate hikes – What did the minutes of the July meeting say &#8211? 15-year high for US 10-year yield

Bearish trends prevailed on Wall Street in the session on Wednesday, with losses in the indices widening after the release of the minutes of the last meeting of the Fed, which reflected the possible intention of the board to maintain the restrictive monetary policy as inflation still remains very high. .

On the board, the Dow Jones fell 0.52% to 34,765, the S&P 500 edged up 0.76% to 4,404 and the tech NASDAQ lost 1.15% as to be set at 13,474 units.

Meanwhile, the yield on the 10-year bond ended the session at a 15-year high, up from 4.22% to 4.258%, the highest since June 13, 2008. It was the fifth straight session of gains for yields.< /p>

Investors may not have been … blown away by the content of July's meeting minutes, but they were understandably disappointed as their hopes that the end of the bull cycle was imminent were pretty much dampened.

< p>Of course, what has been made abundantly clear lately by council members is that their decisions will be made step-by-step on a case-by-case basis based on the evidence, which means that the time remaining until the July 20 meeting the landscape can be overturned depending on the macroeconomic elements that will intervene. But what was made clear again by the content of the minutes is that at least a majority of FOMC members are concerned about the pace of inflation deceleration and will not easily risk hitting the final pause button.

« With inflation still well above the Commission's target and the labor market remaining tight, most participants continue to see significant upside risks to inflation, which will require further monetary policy tightening,” the minutes note. .

Inflation remains well above the 2% target and the latest data published a few days ago showed that the index's steady, months-long downward trajectory has been interrupted. Of course, the increase in July data was small, from 3% to 3.2%, but it may be enough to make the “hawks” hesitant.

The latter is significant given that the minutes reflect the dichotomy in the board, as the majority of FOMC members wanted interest rates to rise, which they did, while other members suggested a temporary wait-and-see stance to better ascertain the effects of the so-far restrictive policy on the economy. economy, as happened in the June meeting. Two members put on the table the possibility of a temporary pause, worried about the effects on the economy, but the “hawks” had the upper hand. Chances are the vote ratio will be more or less the same next month!

We remind you that after the new moderate increase of 25 basis points, the range of interest rates is at 5.25% to 5.5%, i.e. the highest level in more than 22 years.

In the meantime, in the business field, the flow of second quarter results continues, with the performance of most companies moving at higher than expected levels. From this course it seems that the large retail chains, which are the protagonists of the week's agenda, are excluded. So, after Home Depot yesterday, Target's performance was disappointing today, followed of course by industry giant Walmart.

In terms of stocks, the real estate and media sectors showed the biggest losses in the S&P 500 compared to the energy sector. Correspondingly, the biggest loser in the Dow was the share of Intel with losses of more than 3.5%.

The shares of Chinese companies also came under great pressure, as already yesterday there is widespread fear of the weakening trajectory of the Chinese economy . Thus, companies such as Tencent, Alibaba, JD.com and Baidu measured losses of more than 2%.

A significant drop of more than 20% was also recorded by the share of the electric vehicle company from Vietnam, VinFast Auto, which was considered a logical correction after its highly spectacular debut yesterday on the US market and the Nasdaq, when it jumped more than 250%.

Getty Images stock among the gainers after its upgrade from Imperial Capital and Keurig Dr Pepper after its upgrade by UBS.

Source: 24h.com.cy

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