All three indicators of the American market are moving in positive territory, which is trying to close after a long upward week, with investors assessing the chances of an impending recession.
In particular, the Dow Jones industrial average is up 30,670 points, up 0.6% or 186 points, the expanded S&P 500 is up 0.7% and is trading at 3,785 points, as is the tech-weighted Nasdaq, which is up 0.3%. at 11,086 units.
The three indices entered the session with significant gains on a weekly basis, with the Dow Jones at + 2% and the S&P 500 and Nasdaq up more than 2%.
However, as Todd Jones, CEO of Gratus Capital, points out, the bounce of the indicators does not indicate any general reversal of the course from the resold levels.
“For us, to believe that this is a more stable move, we should definitely see an improvement not only in some of the economic data, but I think mainly in inflation,” he said.
The market closed yesterday with negative signs, albeit with marginal losses, with investors now increasingly considering the possibility of an impending recession, which international companies now consider to be more likely.
Golman Sachs, Deutsche Bank and Citigroup all now estimate that the chances of a recession are at 50% for 2023, according to a report by an Fed analyst released on Tuesday.
For his part, the head of the Federal Reserve, Jerome Powell, speaking in Congress yesterday, also confirmed that there is definitely a possibility of a recession, although he stressed that “it is by no means the desired result.”
Elsewhere, the Fed chairman stressed that the bank is “strongly committed” to curbing inflation and will continue to deposit it in the body today.
For its part, UBS increased the chances of recession to 69%, citing last week’s weak data on the housing market, industrial production and capital goods.
“The odds are in favor of a recession rather than the opposite,” Dan Greenakhaus, chief strategist at Solus Alternative Asset Management, told CNBC. “It’s something of a degree of monetary tightening that the Federal Reserve needs to do now, something it did not do in the past when some of the problems that are going to happen now might have been avoided.”
“Unfortunately, the ‘financial pain’ will be greater than people expected at least six months ago, but they are becoming more and more aware of the fact that this is likely to happen,” he added.
On the labor market front, unemployment benefit claims levels remained close to a five-month high, but at around 230,000 which is a fairly low number overall.
At the same time, the US current account deficit jumped to a new record in the first quarter of the year to $ 291.4 billion, well above the $ 273.5 billion expected by analysts.
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