Wall indices limit their losses after the minutes

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Wall Street indexes remained in the negative, although they pared losses as minutes from the Federal Reserve’s latest monetary policy meeting showed some central bank officials worried about the risk of US interest rate hikes proving too aggressive.

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Minutes of the July meeting (26-27) published today showed that officials reiterated last month that future rate hikes would be shaped by the evolution of incoming data, with some noting however that rates should remain unchanged at “sufficiently restrictive levels” for “some time” in order to control inflation.

At the same time, some Fed officials expressed concern about the “significant risk” that higher inflation could take hold if the public begins to question the central bank’s resolve to raise interest rates to rein in inflation.

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On the other hand, “many” Fed officials expressed concern about the risk that the central bank’s monetary policy tightening could turn out to be too much.

“Many” officials noted the risk that the Fed “could end up tightening policy direction more than necessary to restore price stability.”

Expectations of a more dovish stance by the Fed on policy tightening combined with a strong quarter of corporate results helped indices recover from June lows and climb to more than three-month highs. The S&P 500 is up 17.4% from a mid-June low, while the tech-heavy Nasdaq is up 23.1%, though it has lost more than 16.3% since the start of 2022.

Indicators – Statistics

On the board, the Dow Jones lost 57.43 points, or -0.17%, to 34,094.58, while the S&P 500 fell 12.62 points, or -0.29%, to 4,292.66. The tech Nasdaq lost 84.62 points, or -0.65%, to 13,017.88.

Of the 30 stocks that make up the Dow Jones industrial index, 14 move with a positive sign and 16 with a negative sign. The biggest gainer is Apple with gains of $2.52 or 1.46% to $175.55 followed by IBM at $138.06 with an increase of 1.10% and Chevron with gains of 1.00% to $157.97

The biggest losers are Boeing (-2.32%), Walgreens Boots Alliance (-2.20%) and 3M (-1.64%).

On the earnings front, after better-than-estimated earnings from Walmart and Home Depot on Tuesday, Target and Lowe’s followed today, with the former failing to meet market expectations. Lowe’s, for its part, warned about its sales performance this year, citing the impact of high inflation on consumer spending power.

At the end of the day, retail sales were flat in July, mainly due to lower gasoline prices and fewer new vehicle sales. The average estimate of analysts in a Reuters poll was for a slight rise of 0.1 percent.

Excluding autos, retail sales rose 0.4% in July, while excluding autos and fuel they climbed 0.7%.

At the same time, there was a large increase in the inventories of American companies in June despite the strengthening of sales, as shown by the data announced by the US Department of Commerce.

Specifically, inventories rose 1.4% after rising 1.6% in May, confirming analysts’ estimates. On an annual basis, inventories increased by 18.5%.

Sales meanwhile rose 1.3% in June after rising 1.0% in May. At June’s sales rate, it will take 1.3 months for businesses to clear their shelves.

Source: Capital

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