Wall ‘collected’ its losses after the Fed minutes

LAST UPDATE: 21:55

The publication of the minutes from the last monetary policy meeting of the Federal Reserve put a “brake” on the slide of the main Wall Street indices, with the S&P 500 and Dow Jones temporarily moving to positive territory, before returning to the “red”.

The minutes from the meeting of the Federal Open Market Committee (FOMC) of the Fed confirmed the intention of the US central bank to proceed soon to tighten monetary policy by raising interest rates, in order to curb rising inflation, but also to start reducing it. its balance sheet that has grown excessively amid the coronavirus pandemic.

Thus, on the board, the Dow Jones industrial average, which earlier reached a loss of 300 points, has now “collected” its losses and is moving about 95 points or 0.27% lower, at 34,893.96 points. The broader S&P 500, which is currently down just 0.07% to 4,467.90 points, has almost completely erased the losses, while the technological Nasdaq is showing an improved picture, falling just 0.39% to 14,084.44. units, although earlier it fell more than 1.3%.

Nevertheless, the pressures and volatility on the board are still evident today, despite the better-than-expected data previously announced for retail and industrial production in the US.

Investors are also looking at the front of the Ukrainian crisis, as despite reports of escalating tensions, NATO officials say they have seen no signs of Russian troops withdrawing from the border with Ukraine.

Geopolitical pressures returned to the US market today, after yesterday’s break that led the key indicators to close with gains after three previous downtrends, amid optimism that Russia was finally convinced by international diplomacy not to invade Ukraine. Reports that some Russian troops are withdrawing from the Ukrainian border and returning to their bases, coupled with reports that Moscow is ready for talks with NATO and the United States to resolve the crisis, sparked a relief rally on the Wall on Tuesday.

However, yesterday’s cautious optimism seems to be fading today, after NATO Secretary General Jens Stoltenberg told reporters that “they have not seen the withdrawal” of Russian troops. of troops and more forces are on the way ”.

Meanwhile, the US president, in a speech late last night, warned that a Russian invasion of Ukraine was still possible and that the withdrawal of Russian troops backed by Moscow could not be verified. Biden also urged Moscow to “choose the diplomatic route.”

It is recalled that Russia announced earlier today that more troops and military equipment will return to their bases after the completion of the planned exercises.

Macro

Geopolitical concerns, it seems, can not be offset by even the best-looking economic data released in the US.

It is noted that retail sales in January marked a “jump”, after the “dive” recorded at the end of 2021 due to the rapid spread of the micron mutation. In particular, the value of retail sales increased by 3.8% in January after falling by 2.5% in December, according to data released today by the US Department of Commerce. The rise in January is the largest in the last ten months, while the data for December were revised downwards from the initial measurement for a fall of 1.9%.

Industrial production also improved further last month, with US factories and manufacturing companies gradually overcoming problems with shortages in global supply chains.

In particular, manufacturing production increased by 0.2% after the revised fall of 0.1% in December, as announced today by the Federal Reserve. Compared to January 2021, production increased by 2.5%.

Total industrial production, which includes the mining sector and production by utilities, climbed 1.4% in January after falling 0.1% the previous month.

The average estimates of analysts in a Bloomberg poll spoke of an increase in manufacturing production by 0.2% and total industrial production by 0.5%.