LAST UPDATE: 21.30
The Dow Jones also went “red” after the publication of the minutes of the last meeting of the Federal Open Market Committee (FMOC), according to which Federal Reserve officials pointed out that the US Federal Reserve may not just raise interest rates sooner. than expected in 2022, but also to reduce its total assets to curb inflation.
According to the minutes, “some officials noted … that interest rate hikes could be justified sooner or faster than market participants expected. of the balance sheet of the central Federal Bank “.
The minutes released today provided more details on the Fed’s shift in December to a more aggressive monetary policy. The policy makers agreed to hasten the end of the emergency bond-buying program that was implemented in the midst of the pandemic and estimated that they expect three interest rate hikes of 25 basis points each in 2022.
Minutes show that the Fed is not just discussing an initial increase in interest rates, but also whether it will use a second “paper” to contain inflation, allowing the reduction of US government bonds and mortgages.
Following the publication of the minutes, the Dow fell to negative ground and by that time was gaining about 100 points, going to the third consecutive record in the same number of sessions at the beginning of 2022.
The losses of the Nasdaq and S&P 500 widened, as tech stocks were already under pressure in anticipation of Fed practices but also due to the rise in US government bond yields at the beginning of the new year (the 10-year added on Monday and Tuesday 17 base units in total). Today, his performance 10-year US government bond had fallen to 1.65%, however after the publication of the minutes it strengthened to 1.68%. The dollar notes losses of 0.4%.
As Matthew Tuttle, Tuttle Capital Management’s Chief Investment Officer, foretold: “The minutes of the last Federal Open Market Committee meeting could have an impact on the market, as investors are currently focusing on impending interest rate hikes and rising inflation.” .
Meanwhile, US private sector job growth continued at a strong pace in December, as shown by the data announced today.
In particular, U.S. companies added another 807,000 jobs in December, according to the ADP Research Institute’s National Employment Report in collaboration with Moody’s Analytics.
Average analysts polled by Reuters polled 400,000 jobs in December. November data were revised downwards to 505,000 positions instead of the 534,000 originally announced.
Indicators – Statistics
On the dashboard, the industrial Dow loses 0.6% to 36,570 points, o S&P 500 falls by 1.44% to 4,720 points and the technological Nasdaq slipped 2.84% to 15,170, heading for a two-week low.
From 30 shares that make up the Dow, 17 stocks are moving with a positive sign and 13 with a negative. The gains are led by Merck (+ 2.97%), Intel (+ 2.14%) and Walmart (+ 1.88%), while the biggest losses are recorded by Salesforce (-8.23%) and Microsoft (-3 , 19%).
The automotive sector is also in the spotlight, following the Tesla and Ford rallies. Today the former trades at -1.15% and the latter gains 1%.
General Motors is set to launch a all-electric Chevy Silverado on Wednesday, but its share is down 0.97%.
Sony, on the other hand, is trading 0.44% higher at $ 129, while earlier it recorded a profit of 3.2%, exceeding $ 132 and was on track for its highest price since April 2000. The Japanese giant announced that it plans to enter the electric vehicle market from the spring of 2022 and founded the company Sony Mobility in order to “investigate a commercial circulation” of electric vehicles. Sony president Kenikiro Yoshinda has unveiled a prototype SUV, the VISION-S 02, which uses the same electric vehicle platform as the VISION-S 01 coupe, which has been on public road testing in Europe since December 2020. .
Beyond Meat shares not only moved away from the day high at 5%, but fell to negative ground. The company announced that the product of fried chicken of vegetable origin is coming to KFC stores in the USA next week.
Citigroup: Sees the S&P 500 over 5,000 units
Meanwhile, Citigroup analysts have revised upwards their S&P 500 target price estimates for the end of 2022, estimating that it will exceed the level of 5,000 points for the first time, as Citi expects strong corporate profits to continue this year, as reported by Reuters.
The business results of the S&P 500 in 2021 exceeded even the most optimistic estimates of analysts, showing an annual increase in the first three quarters by 52.8%, 96.3% and 42.6% respectively, according to data collected Refinitiv.
For the fourth quarter, Refinitiv places the annual profit growth at 22.3%. In this context, Citigroup analysts revised the target price for the S&P 500 to 5,100 from 4,900 points in October, although they warn that the tightening of monetary policy by the Federal Reserve could create unfavorable conditions for valuations.
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I am Sophia william, author of World Stock Market. I have a degree in journalism from the University of Missouri and I have worked as a reporter for several news websites. I have a passion for writing and informing people about the latest news and events happening in the world. I strive to be accurate and unbiased in my reporting, and I hope to provide readers with valuable information that they can use to make informed decisions.